2. Outline
Advertising
History
Types of Advertising
Computational Advertising
Participants
Business Models in Comp. Advertising
Landscapes
…
3. • Advertising is a form of marketing communication used to
encourage, persuade, or manipulate an audience (viewers,
readers or listeners; sometimes a specific group) to take or
continue to take some action.
Awareness
Knowledge
Liking
Preference
Conviction
Purchase
Advertising
4. Long History…
Egyptians used papyrus to make sales messages and wall
posters, date back to 4000 BC.
In ancient China, the earliest advertising known was oral, as
recorded in the Classic of Poetry (11th to 7th centuries BC) of
bamboo flutes played to sell candy.
In Europe, as the towns and cities of the Middle Ages began to
grow, and the general populace was unable to read, instead of
signs that read "cobbler", "miller", "tailor", or "blacksmith"
would use an image associated with their trade such as a boot, a
suit, a hat, a clock, a diamond, a horse shoe, a candle or even a
bag of flour.
In the 18th century advertisements started to appear in weekly
newspapers in England.
5. Papyrus
JAPAN, 1806
traditional
medicine
called
Kinseitan
6. A Coca-Cola advertisement
from the 1890s
A 1900 advertisement for
Pears soap
7. On the radio from the 1920s
Public service advertising in WW2
Commercial television in the 1950s
Media diversification in the 1960s
Cable television from the 1980s
On the Internet from the 1990s
8. Types of Advertising
Television advertising / Music in advertising
Infomercials
Radio advertising
Online advertising
New media
Press advertising
Billboard advertising
Mobile billboard advertising
In-store advertising
Coffee cup advertising
Street advertising
Aerial advertising
11. Direct marketing
Advertising that involves a "direct response”: buy,
subscribe, vote, donate, etc, now or soon
12. The Advertising Market
Internet advertising is a business that is growing faster than old media
advertising (radio, TV, newspapers & magazines, mail, outdoors)
Online advertising budgets still lagging in proportion to time spent online, which
is growing fast at the expense of old media.
Seen as a driver to continued growth of online advertising market
•Traditional advertising:
–Few, expensive opportunities
–Targeting en-masse, by immediate context only
–Difficult to measure effectiveness
•Internet advertising:
–Billions of opportunities daily
–Open to personalization via rich context of impression
–Effectiveness is measurable: can measure click-through rates as % of
impressions, and conversions as % of clicks
15. Lots of computational this and that …
Computational Biology
Computational Chemistry
Computational Finance
Computational Geometry
Computational Neuroscience
Computational Physics
Computational Mechanics
Computational Economics
…
All are about mixing an old science with large scale computing
capabilities
16. What’s computational about it?
Classical:
Relatively few venues –magazines, billboards, newspapers, handbills, TV,
etc.
High cost per venue ($3Mil for a Super Bowl TV ad)
No personalization possible
Targeting by the wisdom of ad-people
Computational –almost the exact opposite:
Billions of opportunities
Billions of creatives
Totally personalizable
Tiny cost per opportunity
Much more quantifiable
17. Computational Advertising
New scientific sub-discipline, at the intersection of
(involve)
large scale search and text analysis:
information retrieval: query-ad selection, learning-to-rank.
statistical modeling
machine learning: clustering, classification and regression.
optimization: linear, integer, convex optimization.
microeconomics: game theory, mechanism design, auction
theory.
Classifications
Recommender Systems
18. Computational Advertising
Find the "best match" between a given user in a
given context and a suitable advertisement.
Examples:
Context = Web search results Sponsored search
Context = Publisher page Content match, banners
Other contexts: mobile, video, newspapers, etc.
19. Participants: Publishers, Advertisers, Users, &
“Matcher”
The publisher is the owner of Web pages on which
advertising is displayed.
The advertiser provides the supply of ads.
The ad network is a mediator between the advertiser
and the publisher, who selects the ads that are put on
the pages.
End-users visit the Web pages of the publisher and
interact with the ads.
22. Computational Advertising
Landscapes
Three main types of textual Web advertising:
1. Sponsored search which serves ads in response to
search queries
2. Content match which places ads on third-party
pages
3. Display advertising (banner ads)
Ads are information!
23. Sponsored Search
context: a user issues a query.
publishers: Google (AdWords), Bing (AdCenter),
Yahoo!
max: publisher revenue, s.t. advertiser campaign goal,
budget, user satisfaction.
marketplace: keyword-based GSP with cost-per-click
(CPC) pricing.
system sketch: query analysis ad selection and
relevance click prediction GSP.
28. Contextual Ads
contextual ads: an extension of sponsored search;
context: page content and user behaviour.
publishers: content providers, and major search engines
operate the marketplace.
system sketch: starts with keyword extraction in
absence of user query.
32. Display Ads (Banner Ads)
display ads;
Graphical Ads
context: page, application and user behaviour.
publishers: content providers in display ad-networks operated
by Google (doubleclick), Microsoft (aquantive), and Yahoo!
(rightmedia).
two types of display ads:
1. reserved: delivery guaranteed, contracts negotiated upfront,
pricing based on CPM (cost-per-(k)impression), e.g., brand ads,
direct response.
2. performance-based: max publisher revenue, s.t. advertiser
budget, real-time bidding on exchange, pricing based on CPC/CPA
(cost-per-action)/CPM.
33.
34.
35.
36. Search Advertising Business Models
CPM (Cost Per Thousand) or Cost per Impression
– Advertisers pay for exposure of their message to a specific audience. (M in the
acronym is the Roman numeral for one thousand)
Typically used for graphical/banner ads (brand advertising)
CPC (Cost Per Click) aka Pay per click (PPC)
– Advertisers pay every time a user clicks on their listing and is redirected to their
website.
Typically used for textual ads
CPA (Cost Per Action) or (Cost Per Acquisition)
– The publisher takes all the risk of running the ad, and the advertiser pays only
for the amount of users who complete a transaction, such as a purchase or sign-up.
Typically used for shopping (“buy from our sponsors”), travel, etc.
37. Summary
Key Messages
Computational advertising = A principled way to find the "best match“
between a given user in a given context and a suitable advertisement.
Two main types of online advertising are graphical and textual
advertising.
Sponsored search is the main channel for textual advertising on the web
Advertising is a form of information.
Adding ads to a context is similar to the integration problem of other types of
information
Finding the “best ad” is a type of information retrieval problem with multiple,
possibly contradictory utility functions.
New application domains and new techniques are emerging every day
Good area for research + new businesses.
38. Many active research areas & open
problems
query understanding
content matching
sentiment analysis
online modeling
massive optimization
text summarization
named entity extraction
computer-human interaction
economics of ads
39. References
Computational Advertising course @ Stanford:
http://www.stanford.edu/class/msande239/
Internet Advertising and the Generalized Second-Price
Auction: Selling Billions of Dollars Worth of Keywords,
Edelman, Ostrovsky and Schwartz
From query based Information Retrieval to context driven
Information Supply, Andrei Broder
Just in time contextual advertising, Anagnostopoulos et al.
Internet Advertising and Optimal Auction Design, Schwarz