Online Marketing – Version 2.0

Marketing your small business across the new landscape of the Web.

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o Serial entrepreneur – 4 startups so faro >6 years experience in online advertising market

o About the Rubicon Project (current employer)o Advertising Infrastructure Company

o Mission: To automate the buying & selling of online advertisingo 150 passionate employees

LA (HQ) - New York – San Francisco – London – Sydney – Hong Kong

o $42MM fundingo Pioneered Ad Network Optimization 10.07

A little about me ….

Today I’ll Talk About

• High-level market discussion– Online advertising history– Trends and challenges

• More practical and hands-on …– Using the Web to gain exposure

• Online advertising 101 (media you buy)• Evaluating three example campaigns• Social media marketing (media you earn)• Examples of social media marketing

– New forms of measurement

The People-Driven Web

• Business-driven people-driven• Authentic and open communications• No one has control!

1999 2007

Online Marketing Version 2.0

• Banners• 1-2 ad networks• Category/site targeting• “bought” media

• Text, video, rich media, etc.• >400 ad networks• Incredible targeting• “earned” media

US Online Ad Market Size

US Online Ad Market ($ Billions)

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$5

$10

$15

$20

$25

$30

$35

2001 2002 2003 2004 20005 2006 2007 2008 2009 2010 2011

Actual

Estimated

Share of US Online Ad Market

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 20005 2006 2007

Display vs. Search Advertising

Display Advertising• Untargeted• 25x volume of search

yet half the market share

• 83% sold <$1 CPM

Search Advertising• Targeted• $81.65 revenue per

1000 searches

Growth lies in targeting people and behaviors.

Search

Display

Overall Trends

• Focus on performance and ROI

• Continued market growth– 2006 online ad spend per household was $217:

• $980 for newspapers,• $980 for telemarketing, and• $576 for direct mail

– Self-service

• Audience-level targeting and optimization

• “Earned” media

Earned Media

• Word of mouth• Social media marketing• PR• Media interaction• Email forwarding

Media attention earned the hard way, not bought.

Challenges and Opportunities

• Challenges– Signal/noise ratio– Capturing and holding attention– “Banner blindness”– Nothing works continually

• Opportunities– More free exposure venues– No limit to what can work; blank slate– Easy and cheap to test different approaches

Paid Media

Online Advertising 101

Online Advertising Eco-System

Advertisers / Agencies

Publishers

Ad Networks

Optimizers

Online Consumers

Advertisers want to reach people.

Web sites are the proxy.

80% of ad inventory flows thru networks.

Rate Structures

• Objectives– Performance (ROI)– Brand (audience reach)

• Rate structures– CPM (cost per thousand impressions)– CPC (cost per click)– CPA (cost per action)– CPV (cost per view)– Sponsorships (cost per time period)

Targeting Options

Traditional• Geographic location• Demographic• Site• Category/channel• Search keywords• Day part

Newer• Interest / affinity• Context• Purchase intent• Persona• Social graph• Influencers

Where to Buy

• Specific Web site(s)

• Specialty ad networks– By format (text ad, video, display, etc.)– By vertical (sports, travel, etc.)– By publisher type (blog, community, owned, etc.)– By targeting capabilities (behavioral, contextual, etc.)– By rate type (CPA/affiliate, CPM, CPC, etc.)

• Ad marketplaces

Elements of a Campaign

1. The advertisement (creative)

2. Where the ad displays, and to whom, when

3. The landing page

4. The call to action, or purchase funnel

All are variables to performance, so all must be optimized.

Tracking and Measuring ROI

• Define your “return” in the form of an “action”?– Registration– Purchase– Monetary value

• Measure cost per action against monetary value

• Simple example: selling UW t-shirts

Ca m pa ign A Ca m pa ign B Ca m pa ign CCa m pa ign pa ra m e te rs:

Cos t 54.00$ 60.00$ 300.00$ Type CP C CP C CP M

Ca m pa ign Re sults:Im press ions 100,000 7,500 300,000 Clicks 145 75 600 Click -through rate 0.15% 1.00% 0.20%Cos t per thousand 0.54$ 8.00$ 1.00$ Cos t per c lick 0.37$ 0.80$ 0.50$

Use r Actions (the funne l)Landing page vis its 145 75 600B rowse catalog 100 65 200S hopping cart 25 30 50Com pleted purchases 5 15 25A verage purchase s ize 22.50$ 34.75$ 26.50$ M argin (25% ) 5.63$ 8.69$ 6.63$

ROI Ana lysisCos t per cus tom er acquis it ion 10.80$ 4.00$ 12.00$ M argin per cus tom er 5.63$ 8.69$ 6.63$

Example ROI Analysis

Ca m pa ign A Ca m pa ign B Ca m pa ign CCa m pa ign pa ra m e te rs:

Cos t 54.00$ 60.00$ 300.00$ Type CP C CP C CP M

Ca m pa ign Re sults:Im press ions 100,000 7,500 300,000 Clicks 145 75 600 Click -through rate 0.15% 1.00% 0.20%Cos t per thousand 0.54$ 8.00$ 1.00$ Cos t per c lick 0.37$ 0.80$ 0.50$

Use r Actions (the funne l)Landing page vis its 145 75 600B rowse catalog 100 65 200S hopping cart 25 30 50Com pleted purchases 5 15 25A verage purchase s ize 22.50$ 34.75$ 26.50$ M argin (25% ) 5.63$ 8.69$ 6.63$

ROI Ana lysisCos t per cus tom er acquis it ion 10.80$ 4.00$ 12.00$ M argin per cus tom er 5.63$ 8.69$ 6.63$

Example ROI Analysis

Ca m pa ign A Ca m pa ign B Ca m pa ign CCa m pa ign pa ra m e te rs:

Cos t 54.00$ 60.00$ 300.00$ Type CP C CP C CP M

Ca m pa ign Re sults:Im press ions 100,000 7,500 300,000 Clicks 145 75 600 Click -through rate 0.15% 1.00% 0.20%Cos t per thousand 0.54$ 8.00$ 1.00$ Cos t per c lick 0.37$ 0.80$ 0.50$

Use r Actions (the funne l)Landing page vis its 145 75 600B rowse catalog 100 65 200S hopping cart 25 30 50Com pleted purchases 5 15 25A verage purchase s ize 22.50$ 34.75$ 26.50$ M argin (25% ) 5.63$ 8.69$ 6.63$

ROI Ana lysisCos t per cus tom er acquis it ion 10.80$ 4.00$ 12.00$ M argin per cus tom er 5.63$ 8.69$ 6.63$

Example ROI Analysis

Optimizing Your Campaign

• Measure, compare, change …

• Campaign funnel– Display location– Creative (click through rate)– Landing page (click through rate)

• Web site funnel– General usability (eliminating points of friction)– Catalog navigation– Ease of purchasing

Tools to Use

• Google AdSense– Messaging optimization– Keyword optimization– Landing page optimization

• Google Analytics– Compare all your advertising sources– Count impressions, clicks, etc.– Creative optimization– Landing page optimization

• A/B and multivariate testing

“Earned” Media

Earned Media is “Linkbait”

• Funny, useful or controversial content• People online are bored!

– If you've got the next "shiny object" to feed the ADHD of the Web, then you too can be a success!

• Examples– Videos– Widgets– Games– Blog posts– Pictures

– Facebook status updates– Twitter posts– Emails– Craigslist postings– Contests

Earned Media

• Benefits – Can be enormously effective– Can be extremely easy/cheap– Helps with SEO– Helps attract/keep people’s attention– People remember it

• Challenges– No recipe for success– Can go horribly wrong– Posers usually get called out. Don’t be one.

Example: KogiBBQ

http://twitter.com/kogibbq50,000 followers

Example: Seattle 2.0

• http://www.seattle20.com

• >25K Web site visitors/month

• PR, word-of-mouth, and social media– Facebook group– Seattle Startup Index, top blogger index, etc.– Blog posts, twitter posts, etc.

• First event drew over 300 people @ $50/ticket

Example: Monk-e-mail

The Monk-e-mail Result

• 2 spots on the Superbowl– $5MM cost– 10M people exposed for 30-60 seconds

• (but not engaged!)

• One viral campaign– $250K cost– 30M people interacting for 8 minutes

Earned Media Advice

• Contribute – Write interesting stuff frequently– Comment on other’s blog posts, tweets, etc.– Be generous with links– Be authentic!

• Build your audience• Linkbait

– Content that people just naturally link to and share– Funny, useful or controversial!

• Spend time on it. Put value into it.

New Forms of Measurement(because of Earned Media)

“Buzz” and Sentiment Measurement

• Monitor chatter about your product/brand – What people are saying– Where people are talking about you – Overall sentiment trends

Friends, Followers, Votes, Retweets

The Power of Passed Links

• 20% of site visits from links shared (earned)• 14-24 year old demo

– 88% of links followed were sent to them by friends• 2-4x increase in conversion rates

• http://meteorsolutions.com/?fbid=TY2Xsky3p5I

• Measures how much of your traffic was from “socially shared links”

Conclusion

• Use search engine marketing to:– Optimize your messaging– Optimize your creative, landing page conversion,

funnel, etc.

• Use social media to reinforce your messaging– SEO “link juice”– Just be authentic and contribute value– Develop a following and keep at it

• Continue with other forms of paid online marketing, optimizing for ROI

Jordan MitchellThank you!

Jordan MitchellVP of Data Intelligence, the Rubicon Project

Email: jordan@rubiconproject.comBlog: http://kickstand.typepad.com

Twitter: http://twitter.com/kickstand