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

Uploaded by googlepublicpolicy on 22.09.2010


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
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.
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
We know that many of you work for agencies, ad agencies and
PR firms. We know that many of you work for advocacy
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

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?
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
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?
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
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
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
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
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.
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