Digital Media – Lecture 1A
1.1 The Basics of Online Display Ads
How digital supports the customer journey
1. Online Display Ads
US Advertising Expenditures by Media
• Digital is largest ad spending channel & overtook TV in 2016
• Within digital, online display ads (54.6%) is the largest channel, followed by
search (41.6%)
• Google & Facebook represent about half of all US spending
Similar global ad spend trends with Internet spending spiking
,Mobile dominates digital, CTV growing fast
Top 2 firms represent 56.8% of online ad spending
o Google
▪ Overall: 37.2%
▪ Display: 12.5%*
o Facebook
▪ Overall: 19.6%
▪ Display: 39.1%*
o Market dominance arises from:
▪ Targeting & measurement capabilities,
▪ Scale
▪ Ease of use (particularly for small & medium size businesses)
• Amazon is big in search, Amazon now #3 in US digital display ad revenues ($2.76 billion)
▪ In 2020, Walmart launched ad platform to buy search & display on walmart.com
Despite COVID hit, digital ad spend continues to grow rapidly
,Some examples of online display ads
Beyond banner ads
o Morphing ads
o Video ads
• Ad Impression = a single ad on a single page loaded by a single user at one time
Relative importance of pay models
o Cost per mile (CPM) – cost per 1.000 impressions
o Performance:
- Cost per Action (CPA)
- Cost per Click (CPC)
, Some facts about display ads
▪ Typical user is served 1,707 banner ads per month (ComScore)
▪ Half cost between $0.10 and $0.80 CPM (Turn)
▪ Click-through rates are .1% (DoubleClick)
▪ Up to 50% of clicks on mobile banner ads are accidental (GoldSpot Media)
Banner ads are sold in one of two ways
1. Guaranteed Contract
Bulk ad purchase that specifies the price and quantity, as well as the time frame and targeting criteria
- Examples;
▪ “3 million impressions to US users on the New York Times finance-related pages in July for $30,000”
▪ “All impressions on the ESPN homepage on Sept 21 for $80,000”
2. Ad Exchange
A platform running an auction to determine which advertiser buys an individual impression in real time (<0.1
seconds)
- Examples;
▪ Uniqlo participates in a real time bid to display their ad on a fashion blog
1.2 Targeting Online
Targeting option 1.
a) Demographics
o Publisher provides data that a customer has volunteered
o Data management platform provides data a customer volunteered elsewhere or ‘best guess’
- Quality is suspect (Neumann, Tucker, & Whitfield 2018)
b) Contextual targeting
o Ad is matched to content it is displayed beside
c) Geographic targeting
o User entered, inferred from IP, `pinging’ device
o Distinguishing feature of mobile
d) Time of day
Targeting option 2.
a) Database match
o Merge in own customer relationship management (CRM) database using e-mail or terrestrial
addresses
o Target existing customers (users in merge)
o Prospect for new customers (users not in merge)
o Makes offline sales data visible
1.1 The Basics of Online Display Ads
How digital supports the customer journey
1. Online Display Ads
US Advertising Expenditures by Media
• Digital is largest ad spending channel & overtook TV in 2016
• Within digital, online display ads (54.6%) is the largest channel, followed by
search (41.6%)
• Google & Facebook represent about half of all US spending
Similar global ad spend trends with Internet spending spiking
,Mobile dominates digital, CTV growing fast
Top 2 firms represent 56.8% of online ad spending
o Google
▪ Overall: 37.2%
▪ Display: 12.5%*
o Facebook
▪ Overall: 19.6%
▪ Display: 39.1%*
o Market dominance arises from:
▪ Targeting & measurement capabilities,
▪ Scale
▪ Ease of use (particularly for small & medium size businesses)
• Amazon is big in search, Amazon now #3 in US digital display ad revenues ($2.76 billion)
▪ In 2020, Walmart launched ad platform to buy search & display on walmart.com
Despite COVID hit, digital ad spend continues to grow rapidly
,Some examples of online display ads
Beyond banner ads
o Morphing ads
o Video ads
• Ad Impression = a single ad on a single page loaded by a single user at one time
Relative importance of pay models
o Cost per mile (CPM) – cost per 1.000 impressions
o Performance:
- Cost per Action (CPA)
- Cost per Click (CPC)
, Some facts about display ads
▪ Typical user is served 1,707 banner ads per month (ComScore)
▪ Half cost between $0.10 and $0.80 CPM (Turn)
▪ Click-through rates are .1% (DoubleClick)
▪ Up to 50% of clicks on mobile banner ads are accidental (GoldSpot Media)
Banner ads are sold in one of two ways
1. Guaranteed Contract
Bulk ad purchase that specifies the price and quantity, as well as the time frame and targeting criteria
- Examples;
▪ “3 million impressions to US users on the New York Times finance-related pages in July for $30,000”
▪ “All impressions on the ESPN homepage on Sept 21 for $80,000”
2. Ad Exchange
A platform running an auction to determine which advertiser buys an individual impression in real time (<0.1
seconds)
- Examples;
▪ Uniqlo participates in a real time bid to display their ad on a fashion blog
1.2 Targeting Online
Targeting option 1.
a) Demographics
o Publisher provides data that a customer has volunteered
o Data management platform provides data a customer volunteered elsewhere or ‘best guess’
- Quality is suspect (Neumann, Tucker, & Whitfield 2018)
b) Contextual targeting
o Ad is matched to content it is displayed beside
c) Geographic targeting
o User entered, inferred from IP, `pinging’ device
o Distinguishing feature of mobile
d) Time of day
Targeting option 2.
a) Database match
o Merge in own customer relationship management (CRM) database using e-mail or terrestrial
addresses
o Target existing customers (users in merge)
o Prospect for new customers (users not in merge)
o Makes offline sales data visible
