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DC Ad Week & Google DC Talks Present – 10 Things You Don’t Know About Online Advertising

DC Ad Week & Google DC Talks Present – 10 Things You Don’t Know About Online Advertising

CARY HATCH: Good afternoon,
I’m Cary Hatch. I’m CEO and Brand Advocate
at MDB Communications. It’s also my privilege to be
the chairman of Advertising Week DC 2010. This year is our seventh year
celebrating advertising week here in Washington we celebrate
the best of the advertising, marketing, and
media community, right here in Washington. As you know, DC has the greatest
concentration of power and influence in the
country and on the planet. Some of the region’s smartest
people work as communications professionals for advertising,
PR, and government agencies, corporations and media
companies. Every day, these talented and
innovative professionals launch new strategies, messages,
programs, and campaigns, that connect to
DC’s own highly informed audience and with specific
audiences around the country and around the world. you might be surprised to know
that per capita Washington DC has the greatest concentration
of advertising marketing and PR professionals
in the country. More than LA, New York,
Boston, and Chicago. So it’s only appropriate that
this year’s advertising week is bigger and better
than ever. This year’s theme is, Insights
from the Maintenance of Messaging, Marketing,
and Media. That’s a hefty title live up to,
but I think you’ll agree we’ve succeeded. We’ve attracted the leading
minds in our industry to join us this week. I invite you to join us this
evening at USA Today, in their Tyson’s headquarters, where will
we will be premiering the domestic premiere of the Cannes
Advertising Festival. We have an exciting lineup
of speakers tomorrow and Wednesday in downtown
Washington, at the National Geographic headquarters, and
at the Mayflower Hotel. You can go to
advertisingweekdc.com to see a full schedule. We also have events programs
at the front door as you came in. But now, please put down your
iPhone, your Droid, or your BlackBerry, as I introduce our
host. With such an ambitious agenda, it’s only appropriate
that we kick off Advertising Week DC at Google. And here to know more about
the ten things we don’t already know about online
advertising, it’s my pleasure to turn it over to Randy
Rothenberg, President and CEO of Google Interactive
Advertising Bureau. Randy? RANDY ROTHENBERG: Thank you. It’s not the Google Interactive
Advertising Bureau, it’s just the
Interactive Advertising Bureau, of which Google
is one of 400 members. So thank you very, very much. We’re basically here to
answer your questions. So we’re going to breeze through
some kind of top line overviews of the industry, and
what it looks like, and what we do for a living. And ideally, then open it up to
your questions and robust conversation. We know that many of you work
for agencies, ad agencies and PR firms. We know that many
of you work for advocacy organizations. many of you work on the hill. So you come from a diverse
number of backgrounds. Your interactions with
advertising and marketing are also very diverse. So we’d really like to just
absorb your questions and see if we can create as much
understanding as possible. The IB, is the trade association
for ad supported interactive media companies
in the US. Our members are all sellers
of interactive advertising inventory in one way,
shape, or form. And that covers a very wide
range from big companies, big interactive native companies
like Google and Yahoo and Microsoft and AOL. To the online divisions of the
major media companies, incumbent media companies, in
the US, New York Times, Conde Nast, Disney. To specialists in content like
WebMD in health and cars.com in automotive. To then specialists in platforms
Jumptap in mobile Wild Tangent in games. And among all of us coming
from agencies and media companies and elsewhere, we’ve
absorbed a lot of data, a lot of interactions, a lot
of relationships. So hopefully, we’ll be able to
respond to your questions. Just giving you a sense of- I’ll
skip who we are because we will introduce ourselves
along the way, but that is who we are. Just to give you a sense of
the size and scope of the whole thing. I can’t move too far because
I’m plugged into the chair. This is dangerous. Interactive digital advertising
is now the third largest advertising medium
in the United States. These are PWC figures. And really after television
distribution and newspapers, let us not forget that the
newspaper industry is a really very large industry, comes
digital advertising. We’re larger than radio,
larger than consumer magazines, larger than
cable television. That’s not generally
well known. So that counts as three of the
ten things I hope you weren’t really aware of. We’re also, in fact,
the second most popular consumer medium. I’m very intrigued by that
Christmas bangle up there. The second most popular
consumer medium. One of the things I’d like to
point out here, this is from various forms of Wall Street
research, analyzed and crunched by my old firm of
Booz Allen Hamilton. If you assume that advertising
spending will more or less approximate consumer time spent
with the medium, you’ll see that there’s quite a lot
of growth that is likely to happen in online. Right now only television,
in terms of discretionary consumer time spent with the
media, only television is larger than the internet. Yet interactive media command
only about 12% to 14% of total advertising budgets in the US,
compared with about 30%, 33% of time spent. So you can anticipate that the
interactive advertising industry will continue to grow,
and fairly dramatically over the next several years. In 2009, you begin to see fairly
striking share shift from other media inter
interactive. Now this was during the most
devastating recession since World War II. And the largest decline in
advertising spent since World War II, it was about a 9% to 12%
decline depending on whose figures you look at. Interactive declined only
3% during that period. So you can see again, this
gradual shift of budget from other media. Now we don’t think of this as
competitive because in this day and age all media companies,
regardless of how they were founded, are
interactive media companies. There are few that are just
pure newspaper or for pure magazine or pure radio
companies. Everything is moving to
digital at the center. We’re beginning to see
a return to growth in interactive advertising. Overall growth in the
advertising industry will be, we hope and expect,
up a couple of percentage points this year. In the interactive industry,
according to IAD PWC figures, we’re up 7 1/2% in the first
quarter, which is pretty robust. And that nearly six
billion dollars are spent in the first quarter of 2010. It was the largest first quarter
we’ve ever registered in the 12 or 13 years that
we’ve been keeping these statistics. Why is this growing? I think some of this should be
obvious to you, but it’s worth looking at some of
the statistics. One of the top ones is just
the growth in the mainstreaming of
digital video. This is worth a show of hands,
is there anybody in the room who has never looked
at a video online? OK. Five years ago, you wouldn’t
have said that. So in November of 2009, you
see we showed 11.2 billion video stream served. The way to think about that
relative to television, the reason I use those statistics
to show it, is television always was considered a white
noise medium, leaned back, very passive. It was there kind of to envelop
us when we came home from work or during the day
as we were toiling away. Digital video, almost by
definition, every one of those streams is stream by
request. It’s a much more active medium. That makes it something that’s
quite tantalizing to marketers, not just consumers. This is possible because of a
statistic I’m not showing, which is currently about 3/4 of
all internet homes in the United States have broadband. And broadband equates with video
usage, it also equates with rich media, and it
also equates with time spent with the media. Another driver of growth
is obviously the growth of social media. These are about, I think these
are about a year old, those statistics. But, and again it’s
US, take a look. Facebook with a 100 million
households. Recently they announced 500
million users worldwide. This is astonishing. is there anybody who
is not on Facebook? OK. One, two, about three. Anybody who’s not on LinkedIn? I’m raising this because again,
five years ago most of the hands in this room
would have gone up. The notion here that, you’ve got
to bring yourself back in time a little bit and realize
that a couple years ago this thing called social media did
not exist. And now it is an all encompassing participatory
sport by most people you run into. And the rise of the mobile
internet, US actually lags behind most of the rest
of the world in this. We can show lots of usage
everywhere, lots of projections. This does appear to be the year
that for advertising in mobile devices we reached
an inflection point. the iPad is the first of many,
many tablet devices that kind of merge the glories of the full
screen internet, the fix for a laptop internet,
with pure mobility. That, 3G networks now moving to
4G networks, smartphones, all of a sudden we’ve got a
new consumer medium, a new entertainment medium, a new
information medium, and that translates into a new
advertising and marketing support medium. So you can look towards a
great deal of growth and certainly an enormous amount
of excitement coming up. And we can talk about
more of this later. But I would like to pass
the magic wand to Peter Greenberger from Google
who will continue. PETER GREENBERGER:
Thank you, Randy. You’re brave to stand up. I’m worried if I get out of
my chair I will explode. My name is Peter Greenberger and
I am head of public sector adverts here at Google. also head of industry
relations. And for those two hats, I
oversee our advertising sales to government, as well as, our
relationships within the advertising industry with the
folks like Randy from the IAb and other people around
the country. I started at Google in 2007 as
the head of our political advertising team. So I’ve had plenty of experience
in this town selling advertising. Randy gave us a great broad
strokes overlook of the industry of where we are with
the digital space right now, how it’s growing, how it impacts
all of our lives, and what we do with the
hours of our days. I want to start a step or two or
maybe three back, with the basics, with search advertising,
which we really see as the building blocks
of online advertising. I’m going to start with another question for the audience. I’m hoping for a slightly
different response than some of Randy’s questions. How many people here, by a show
of hands, conducted an internet search today. That’s pretty good. A few of you need to
get back to your computers and do some searching. How many people searched
on Twitter or Youtube or Facebook today? So some hands. So search is happening
everywhere. We like to say at Google that
everybody is searching for something and many of us are
searching for lots of things every day. Which is good news. The reason that people search
is because there is so much content out there. And we are now entering the
era of the zetabyte. So now there is so much
information online and so much information being created that
I saw the stat today if you had 75 billion iPads, you can
just contain all the world’s digital information. So that number also increases it
increased by 65% in a year. That’s the amount of content
being created on the internet. So I think we’re going to need
more tablets very soon. So keep your eyes peeled
for Android. What I’d like to do now
is step forward. And so we’re all on the very
same page here, I’m going to start at the basics with a SERP,
which is a fancy word for search engine
results page. So what you’re looking at here
should hopefully look pretty familiar to everybody. It’s got the three column set up
which is now similar across most search engines. On the left hand side, you’ve
got different ways to organize and categorize your search,
if you want different search options. Here at the bottom, or in the
middle space in white, the color might not be coming out
true for everybody, but in the white space you’re seeing
the organic or the natural search results. So these are the search results
being determined by the famed algorithm, whether
it’s the Google algorithm or being Yahoo algorithm or other
search engines, it’s hoping to first provide to you as the
user, the most relevant information you’re looking
for at any moment. Google alone, processes about
a billion searches a day. And about half those now
come from overseas. So this is happening many, many
times throughout the day. Simultaneously, you’re seeing
two other things happened here, some of the top of the
screen shaded in the light purple, and some on the right
hand side of the screen, These are the sponsored links. So this is an opportunity for
advertisers to put their message in front of the user at
the very moment that he or she is looking for specific
information. In this case, looking
for flowers. I’ll show you here at the bottom
the ranking of the advertising, of the sponsored
links, is also by to some degree relevancy. So what we’re looking at is how
relevant is the ad to the user, and generally that’s
gauged by click through rates, how often our users clicking
on the ads. Are they spending time on the
site once they use that click? As well as, what they’re
willing to bid. And will talk a little bit
about that in a moment. But this is really the bread
and butter of search advertising. The three things I want to talk
about very quickly that you may or may not know which
are unique to search advertising and digital
advertising, more broadly said, are flexible pricing,
precision targeting, and measurement, measurable
results. So I’ll jump right in. Looking at pricing, so
advertising with search is quite different than other
various types of media so it is cost per click. Which means that nobody pays a
cent unless somebody actually clicks on the ad. So the impressions are free,
quite different for instance from television or
print or radio. There are also no set prices. So the price that you pay for
your search ad when it is clicked on by a user is
determined by the market, what are other advertisers willing
to bid for that same word or that same search query. It’s also what’s called
a vickrey auction. So that means that if you bid
$3.00 and somebody else bids $2.00, you win the auction
and you only pay $2.00. The first place bidder actually
only pays what the second place bitter is
willing to spend. So this is smart pricing, making
sure that you don’t over spend for your word. There are also no contracts,
there are no commitments. So you can start this campaign
today and you can pause it this evening or right
after you start it. You can start and stop
at any time. There are no minimums and there
are no maximums. So you can start by bidding a dollar
a day or you can start by bidding a million
dollars a day. And you can start or
stop as you wish. So the flexibility of search
advertising makes it very attractive to both small
and large advertisers. The second piece of search
advertising that I want to talk about is how specific and
precise you can target your customers or your users that
you’re interested in reaching. So we’re going to return again
to the flowers example, here you see the same query as before
someone is searching for flowers. You’re seeing the ads on the
top and on the right. And what you see highlighted
here is Raimondi’s flowers. Now Raimondi’s flowers is a
local florist, I don’t know if anybody here are Raimondi’s fans
or maybe Raimondi is in the audience. Raimondi has a floral
shop in Maryland. They service the beltway,
the DC area. And so if the user, myself in
this case, is searching for information about flowers, we
know that if you’re looking for information about flowers
you are most likely looking to buy flowers, and obviously a
very logical and relevant result would be a
local florist. So what you’re seeing here is
an opportunity to do what we called geotargeting. So this ad, which as you see
here says District of Columbia at the bottom, letting you
know that you’re being geotargeted to, that this is
a local advertiser which hopefully will attract your
attention here if you are looking to place an
order locally. It’s also allowing Raimondi’s to
compete against FTD and to compete against 1-800-Flowers. All the big boys are on this
list and they’re all paying fractions of a cent, different
prices, to appear on this list. Another way to do this
is by day parting. So these ads can run at
different parts of the day. They may realize that they
sell more flowers around lunchtime, they can run the
ads just between 11:30 and 1:30 and shut them
off at night. This is an example of
the geotargeting. You can do this by region, you
can do it by city, or by DNA, or you can even draw
your own map. Very good for a congressional
districts or other areas that are not normal borders. And then the final piece I
want to talk about is the measurability of all of this. And this is what makes all of
online advertising really so efficient and so effective. You know to the click, you
know to the penny, how effective your campaign
is going. We have products, other
companies have products too. Google analytics gives you
formation about traffic to your site, how many people are
coming, where are they coming from geographically, where are
they’re coming from on the internet, how much time are
they spending on different pages of your site, which
customers are the most cost effective for you, which key
words of the most cost effective for you. And then with tools like
conversion tracking you’re getting an idea of what your
return on investment is. Again this is going to be very
efficient and an easy change throughout your campaign. Before I hand it over to Robin
Wheeler, I’ll just mention one use case which we think
is particularly colorful and useful. I know Mark Twain is credited
with saying that everybody complains about the weather
but nobody does a darn thing about it. Well search advertising can
do something about it. And one thing it can
do is sell soup. So for instance, Campbell’s
knows that they sell more chicken soup when
it’s cold out. And so what they can do
is set essentially a conditional campaign. When it’s cold in certain parts
of the Northeast or when a nor’easter is coming down
the coast or across the country, they can turn on their
search ads in those areas and they can
run soup ads. When you’re typing in your
various afflictions wondering what medication to take, you’ll
remember what your mother or your grandmother said
and perhaps you’ll also purchase a can of
Campbell’s soup. This is particularly good if
there’s a snowstorm and you can’t leave the house, so maybe
you can order Campbell’s soup on Amazon and they’ll mail
it right to your door. So these are just some of
the miracles of search advertising. With that I’ll turn it
over to Robin who will talk about display. ROBIN WHEELER: Peter, miracles
of advertising and the internet in general. Hello everyone. I’m Robin Wheeler. I run the political and advocacy
category for AOL. And they told me to come and
talk about display advertising in about five to seven minutes,
and that for those of you that are familiar with
display advertising is an almost impossible feat. Because there’s just so
many great things you can do with display. To try and narrow it down, I
thought why not look at it through the lens of a political or advocacy campaign. So display advertising can be a
lot like a yard sign except that you have a much bigger
canvas to play with and instead of just hoping people
see it when they pass by driving through the
neighborhood, you can actually decide who’s going to
see it and put it right in front of them. It’s a lot like direct mail, in
that you’re actually going into someone’s home and having
an intimate relationship with them at their computer. But instead, you actually can
determine who has seen it versus whether or not it just
got tossed aside in that garbage pile of mail with
the Sunday coupons. And, of course, it’s a lot
like your TV commercials. The exact same format 30 second
spot, but you get more direct results on who interacted
with it, what these people are like, instead of
just hoping someone didn’t skip it with their DVR. So this first slide, I think
Randall kind of touched on a lot so I’ll glance over
it. it’s just kind of top five things. We talked about consumption. The truth is people, everyone’s
online, they’re researching their political news
online but the budgets are not following. So how do we get there? A couple facts about reach. With display advertising alone,
you can reach more people in Pennsylvania
then all of their local newspapers combined. Or any state, pick a
state any state. On the home page of a display
portal, so that like an AOL, a Yahoo, a Microsoft, you can
reach more people than to tune in for the finale of Lost
or American Idol. So that gives you an idea of the
scale that you can achieve with display advertising. But then I guess the beauty of
digital is again the ability to hone in and reach niche
audiences at scale. So it’s that preciseness they
can get with the targeting. So if you want to reach moms,
Republican moms, in California you can do that with digital. So we look at display in two
different categories content and targeting. So some of the greatest talent
in the traditional media that we know and love have
moved online. I know just at AOL alone, we’ve
hired people from The Wall Street Journal, New York
Times, ESPN, Washington Post, Gourmet magazine. As these traditional outlets
tend to close their doors, digital outlets are scooping
up this talent. So all this quality journalism
that you’ve come to love offline, now exists online. And some really strong brands
exist online alone. Such as Slate, Politico
Moviefone, and so on. Content targeting gives you
the ability to take an audience based on
the content that they’re going to be consuming. So we all know hill influencers
are reading Politico or Politics Daily, so
it allows you to target those individuals based
on that content. A lot of times when you go this
route you can have a much more rich experience in
terms of what the creative looks like. You can sponsor it so you can
really integrate and have an immersive experience with
your brand versus just a 300 by 250 banner. The other way is through
targeting. So we all know that these
influencers are not just reading Politico, but they’re
also moms, or entertainment enthusiasts, or sports fans. So targeting allows you to reach
these individuals no matter where they go throughout
their day. So pick any target and then
reach them as they go throughout the day, throughout
the web. The targeting possibilities
are truly endless. I know Peter talked a little
bit about what we can from geographic standpoint with
search, of course you can do that with display as well. You can target using behavioral
attributes. So if somebody has been visiting
Kelly Blue Book and cars.com and cardirect.com
multiple times over the course of two weeks, we can make the
assumption that they’re in the market for a car and therefore
target them with an automobile ad. You can also target based on
profession so if someone is in manufacturing or teaching, you
can reach them that way. And really these possibilities
are endless. Database matching, if you’ve
spent months and months building up your list of names,
you can take that and match it up against a list that
display partners that publishers have to go
after them that way. You can expand that base by
doing a look like model off of that database. So finding people that look like
your proposed customer and reaching them out there. And so you can buy targeting
through traditional sites and portals or you can go through an
ad network or an exchange, which are aggregators
of inventory. And they allow you to achieve
mass scale with an built in optimization technology. How do you buy digital
advertising? So I’ve mentioned sponsorships,
if you know you’re going to buy a share of
Voice and you own a page outright, there’s also CPM which
is cost per thousand. Similar to buying TV, you
pay for impressions. And then the two performance
based payments RCPC, so cost per click, much like Peter said
for a search can do that with display as well, where
you’re only paying if someone clicks on your ad, or cost
per acquisition. So whether that’s garnering a
name, or selling a product even, you only pay when that
desired outcome is achieved. And this is just an example of
a chart that we pull for all of our campaigns that we run,
but again, Peter mentioned this, but the true beauty of
digital advertising whether it’s display, or search, or
social, is that you can really track it. You’re accountable. And so we really pride ourselves
on the reporting that we can give through
this tool. So once you run a campaign
you can see more and more information about who your
audience is, who’s acting, who’s been exposed but hasn’t
taken an action. And maybe target your efforts
a little bit more appropriately moving forward. So we can give demographic
information on these people. Maybe you thought you were
resonating with women 18 to 24, but really it’s an older
male who is really resonating or reacting to your message. So digital display advertising
gives you immediate results that you can take action on. And then finally, I have some
examples but they’re not live, well there you go how
did you like those? You gotta look quick. OK well, the other thing I’d
mention is the canvas that you’re allowed to play with. In display we’re constantly
evolving this canvas. But rich media today is
way different than it was a year ago. This latest example is what we
call a clutter buster, but you can do in banner videos, you can
ask to immediately shared to your Facebook page
from the unit. You can do data capture. So instead of having someone go
to another site to fill in their email address you can do
it all right there within the rich media unit, and
so on and so forth. I don’t know if anyone saw the
Wall Street Journal article today but, AOL is going to be
unveiling a new ad format next week at ad week which is going
to completely change the way at Ad Week. AUDIENCE: Where specifically? ROBIN WHEELER: New
York Ad Week. AUDIENCE: At the IAB
Mixx Conference? ROBIN WHEELER: Oh, sorry, at
the IAB Mixx Conference. A plug, right there. AUDIENCE: I really had
to extract the plug. ROBIN WHEELER: Sorry. Sorry. I was like, shoot,
where is it? So with said I’m going to
hand it over to Jonah. JONAH SEIGER: I’m
Jonah Seiger. I’m the founder and managing
partner of Connections Media. We’re at full service digital
agency specializing in public affairs and political clients
who were with corporate image foundation in select state,
local, and federal campaigns. And I’m here today to talk about
the social ad, although as a full service agency we
certainly spent a lot of our time and our client’s resources
balancing among these various types of paid
advertising options. And they’re all part of the
mix in addition to the traditional television
and newspaper and outdoors as well. Your campaign goals obviously
should be defining how you allocate your resources. But I’m here today to talk
specifically about the emerging field of social
advertising. Randy talked a little
bit about the growth of social media. I wanted to get right to it,
I’m sure most of you, since you all raise your hands about
being on Facebook. Some examples of Facebook social
ads the first non was obviously as he started
talking about social advertising these are examples
that I pulled last night, none of these are my clients or have
anything particularly to do with them. But I think the thing that’s
most significant to point out here, is that what Facebook
allows you to do is target friends of your pages fans. Again friends of your
pages fans. Which means that you have an
ever increasing circle of potential targets who are all
related in some fashion to the target that you’re originally
trying to get to. So if Robin is a fan of my
client’s page and Peter is her friend, Peter would see this
ad that says Robin Wheeler. An incredible, incredible
targeting potential. So I wanted to poll just a
little example to show you the benefits of this. This is actual data that’s
scrubbed a little bit, actual data from two clients of ours
from earlier this year in terms of growth in their
Facebook fans over a four week period. Now we can have a conversation
in the Q and A about the value of these fans and I think that
is something to be discussed but the blue line represents
a client that went the completely organic approach. Friends of friends emailing
each other, sharing on Facebook, and we saw
some growth, there’s something happening. The red line represents a client
for whom we purchased social ads with examples
I just showed you. You can see that hockey stick
graph on that ability to target friends of your pages
fans in addition to all sorts of other demographic and
geotargeting capabilities. It really propels forward
those numbers. By the last slide I will get the
direction on this thing. Twitter has recently rolled
out a new experiment what they’re calling promoted
tweets. This is a pretty difficult thing
to actually see in the wild, you may not have ever
witnessed it yet it’s still rolling out in a very
selective basis. I’m not going to touch
anything here. These are examples of two
sponsored tweets blown up so you can see them. Essentially what they’re doing,
and by the way this is the new Twitter, anybody else
have the new Twitter yet? So very few of you. This is from last night. I was able to find a promoted
tweet in the wild and just a little side joke, we were
talking about this in the green room. People are calling the new
Twitter like a mullet with the business on the left and then
the party on the right. I really like that expression. What you can do, hopefully you
can see behind me, is that what Twitter allows you to do
is essentially buy your way into the trendy topics. And the algorithm works similar
to the way that Google approaches it, where there’s
a quality score and a relevance score. You can’t just put
crap in there. But it has to be a real tweet it
has to be something people are actually retweeting
and sharing. You can buy your way into the
trendy topics and if you click on that topic it looks like this
and a sponsored tweet is at the top. This particular one is for a new
HBO series that they were running promoted tweets
for last night. I have no direct evidence of the
relative value of this or the success of this, but is a
very interesting concept. And the more time, I think, that
this new Twitter format is personally likely to drive
me to spend more time on the web as opposed to apps. And I think that they’ll begin
to see more impressions on these sponsored tweets
in very short order. You can also use search to
promote your social. This is an example of a very
effective example from a campaign we ran last year for
Mayor Bloomberg’s reelection in New York City, where we
actually purchased Google search terms to promote growth
of the social media community. So this ad was displayed to
people in New York City who were searching for or in a
contractually targeted way the word Twitter, and we saw very,
very strong results both on clicks and conversions by
using this technique. That’s all I got, because
you’ve already seen the end of my deck. Thank you so much for your rapt attention and we look forward

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