A guest lecture presented to undergraduate advertising students at the University of Southern California (USC) Annenberg School for Communications. The lecture was given by Sensis founder and President Jose Villa on October 10, 2011

1. Introduction to Digital
Advertising
Introduction to Advertising
October 10, 2011

2. Agenda
01 Introduction
02 Brief History of Digital Advertising
03 Dissecting Digital Advertising
04 The Future
2

3. Introduction

4. My story…

5. The basics
• Grew up here in LA…
– Proud graduate of Burbank High School
• Went to Harvard University for undergrad
– Majored in Economics and really missed the West Coast
• Worked as a management consultant after school
• Got an MBA from Wharton in Marketing &
Entrepreneurship
• I’ve lived in LA, Boston, Madrid, San Francisco,
Philadelphia, and New York

6. I’ve always been a serial entrepreneur
• Started my first business in 6th grade
• Built custom PCs in junior high
• Started Sensis (as Focus Multimedia)
the summer after graduating from
college

7. I didn’t plan to get into advertising
• Was more a tech geek than creative guy
• I sort of stumbled into this business

8. My agency… Sensis

9. The Sensis story

10. Sensis overview
• 39 employees Agency structure
• Offices:
– Los Angeles, CA
– Washington, DC
– Mexico City, MX

11. clients

12. digital thinking
• Sensis was born as a Web
development agency 13 years
ago
• We have grown into a full-
service agency the last 6
years
• We build brands by making
them live digitally
• Digital is central to all we do

13. right person + right moment + right message
= Precision
• All marketing should be measured
• All our work starts with projections,
is measured by results, and
optimized based on data

14. empathy for “users”
• We don’t look at an
audience of “consumers”
• Because of technology,
users have the real
power
• Our role is to help our
clients participate in the
life experience of users

15. Brief history of digital advertising

16. Digital advertising
Digital advertising refers to
any advertising delivered
through media connected to
the Internet.

17. The birth of online advertising
• The first SPAM email was sent in 1978 when a DEC
employee announced a new computer inviting
everyone with an ARPANET address on the west
coast to a reception)
• Computerized Bulletin Board System, the first BBS,
launched in 1978
• The first commercial online services, CompuServe
and the Source, were founded in 1979

18. The first online (service) ads
The IBM and Sears-run dial-up service Prodigy ran banner ad-
like ads as early as the mid-80’s

19. The birth of online advertising, cont.
• NCSA Mosaic released in 1993, leading to the rise of the
graphic, commercial Web
• Netscape Mozilla becomes the first commercial Web
browser in 1994
• October 25, 1994: the first banner ad runs on HotWired
• The IAB’s Ad Sizes Task Force releases the first real ad
standards in 2003
• March 13, 2006: Rocketboom runs the first video ad

20. 1994: a banner year

21. 1996: Web advertising gets interactive

22. Dissecting digital advertising

23. In 2011, what’s the best way to
think about and categorize
digital advertising?

24. POEM
Earned Media
Paid Media
Owned Media
26

25. POEM Defined
Media Type Definition Examples
Owned Media Channel a company owns. • Retail store
• Website
Company owns the impressions. • Mobile site
• Blog
• Facebook page
Paid Media A channel a company pays to • :30 sec TV spot
leverage. running on Super Bowl
• Web banner ads
Impressions you pay for. • Paid Search
Earned Media When customer, influencers, or • Newspaper article
the media become the channel. mention
• Word of mouth
Impressions not paid for. • Buzz
• “Viral” activity

26. Paid Digital Media

27. Generic Online Ad Spending
Search
Portals
Top Publishers
Specialty Websites
Networks
Social Media,
Widgets, Mobile,
Virtual Worlds

28. Paid Search
• Ads that appear contextually via
search queries on the main search
engines
• Pay per click (PPC)
– Reverse-auction system - the higher
you bid, the higher your ad will likely
appear
– Relevance is also key
• Text only ads
– Ad titles are limited to 25 characters
– The two description lines limited to 35
characters and a display URL

29. Banner Ad - Overview
Sizes Formats
Pricing

30. Banner Sizes
Source: Interactive Advertising Bureau (www.iab.net)

31. Pricing
High
Branding Quality
CPM – cost per thousand impressions
– 100,000 impressions @ $10 CPM = $1,000
CPC – cost per click
– 200 clicks @ $5 CPC = $1,000
CPL – cost per lead
– 25 leads @ $40 CPL = $1,000
CPA – cost per acquisition
Direct Low
– 10 sales @ $100 CPA = $1,000
Response Quality
33

32. Banner formats - Display
• Static or animated
• Effective for both direct response and branding

33. Banner formats - Rich Media
• Overlays, expandable
banners, streamed
video
• Sophisticated online
advertising
• Aims to entertain
and engage user

34. Banner formats - Text Display
• Contextual social
– Facebook, YouTube,
LinkedIn ads
• Contextual mobile app
ads
– AdMob
36

35. Online Video
• Pre-rolls
– Ads appear before the content
– Best-performing
• Mid-rolls
– Ads appear during the content
– Many marketers are wary of the “interruption
factor”
• Post-rolls
– Ads appear after the content
– Post-roll often only performs at a 40% level
compared to the pre-roll
37

36. Email
Newsletters
– Like banner ads
on an email
newsletter

37. Email
Email Blasts
– Email that
only contains
your ad.

38. Email Metrics
• Bounce Rate (Delivery Rate)
– How many emails actually went to someone
• Open Rate
– How many emails were opened by the recipient
– Clicks / Impressions
• Click Rate
– How many clicks on links in the email
• Forward Rate
– How many people forwarded the email to friends
• Unsubscribe Rate

39. Offline Digital
• Digital Out-of-Home
– Display creative (banners)
would be leveraged across
DOOH platforms
• Digital Billboards
• Digital Display
– Coffee shops, supermarket
check-outs, gas stations
• In-store Video Advertising
– In-Store, Closed-Circuit
Television (Walmart TV,
Home Depot)

40. Offline/Online Integration
• Incorporating digital into traditional “offline”
media
– Integrate “Text for more info” call to action
• Radio
– Traffic updates
– Events
• Text, QR codes
– Retail Activations
• QR Codes

41. Ad Serving & Targeting
• Ad servers
– Place ads on websites
– Count impression/click/leads
– Enable targeting
– DART (DoubleClick), Atlas, 24/7 OAS, etc.
• Geotargeting
– Where will your ads be seen?
– Country, state, DMA, area code, zip code, etc.
• Other targeting
– Daypart, browser, bandwidth

42. Metrics and Measurement
• Impressions & Clicks
• CTR – click-thru rate
– How many of my ads got clicks?
– Clicks / Impressions
• eCPC – effective cost per click
– How much did each click cost me?
– (Impressions x CPM) / Clicks
• eCPL – effective cost per lead
– How much did each lead cost me?
– (Impressions x CPM) / Leads

43. Earned Media

44. Social Media
Social media
has created a
new form of
technology-
empowered
guerrilla
marketing

45. Word of Mouth
• The act of consumers providing information to other
consumers.
• Word of Mouth Marketing:
– Giving people a reason to talk about your products and
services, and making it easier for that conversation to take
place.
– The art and science of building active, mutually beneficial
consumer-to-consumer and consumer-to-marketer
communications.

46. Types of WOM Marketing
• Buzz Marketing: Using high-profile
entertainment or news to get people to talk
about your brand.
• Viral Marketing: Creating entertaining or
informative messages that are designed to
be passed along in an exponential fashion
• Community Marketing: Forming or
supporting niche communities that are
likely to share interests about the brand
(such as user groups, fan clubs, and
discussion forums)

47. Types of WOM Marketing (cont)
• Evangelist Marketing: Cultivating
evangelists, advocates, or volunteers who
are encouraged to take a leadership role in
actively spreading the word on your behalf.
• Product Seeding: Placing the right product
into the right hands at the right time,
providing information or samples to
influential individuals.
• Influencer Marketing: Identifying key
communities and opinion leaders who are
likely to talk about products and have the
ability to influence the opinions of others

48. Types of WOM Marketing (cont)
• Conversation Creation: Interesting or fun
advertising, emails, catch phrases, entertainment,
or promotions designed to start word of mouth
activity.
• Brand Blogging: Creating blogs and
participating in the blogosphere, in the spirit of
open, transparent communications; sharing
information of value that the blog community
may talk about.
• Referral Programs: Creating tools that enable
satisfied customers to refer their friends.

49. Search Engine Optimization (SEO)
• Improving the volume and quality of traffic to a
web site from search engines via "organic"
search results for targeted keywords.
• The higher a web site ranks, the greater the
chance that it will be visited by users.
• Search engines generate nearly 90% of all
Internet traffic.
• SEO is a long-term strategy.
• Highest ROI of all marketing tactics.
51

50. Owned Media

51. Websites
Corporate Websites Microsites / Landing Pages
• Home of brand messaging - • Single-message or –purpose
the principal piece of customer Web destinations
interaction architecture • Usually used to drive direct
• Users will quickly assess their response (landing pages)
opinions of brands &
companies based upon their
interaction with their Websites

52. Corporate Websites

53. Microsites & Landing Pages

54. Mobile
Mobile Apps Mobile Websites
• Games, lifestyle tools • Mobile versions of a Website
• Opportunity for branded • Mobile-optimized Websites
applications

55. Social Media (again)
• Facebook pages
• Twitter feeds
• YouTube channels
• Yelp profiles

56. Facebook
Company
pages

57. Twitter

58. Social
Facebook gaming

59. New stuff

60. Social Buying /
Deals

61. In-game
Advertising
Form of
branded
entertainment

62. The future of digital advertising

63. The digital future

64. All advertising
will be digital
Billboards are going digital. Cable TV is incorporating digital-
like targeting capabilities. TV ads look like banners…

65. Advertising
agencies will
adapt or die.
Traditional and digital advertising agencies will converge. Those
that don’t will disappear…

66. How advertising will change

67. Brands &
branding
won’t change
The idea of brands and branding aren’t really going to change.
How we go about building them is and will continue to do so…

68. Digital will be at the center
“[Digital] is the centerpiece of a broader campaign.
I think that’s become a real integral part of how we
use the web, moving beyond just promoting web
addresses in TV spots or print ads to really making
them a critical part of the storytelling for the
brands.”
Rob Master
Media Director, North America
Unilever

69. Shift from
“consumers” to
“users”
Advertising will become about creating experiences,
engagement and utility,

70. Content is the new
currency.
Engaging content =
social currency
People, and brands, will pay for great content

71. Content is the new currency
“The agency’s job is to create content so valuable
and useful that consumers wouldn't want to live
without it.”
Jeff Hicks
CEO
Crispin Porter + Bogusky

72. The next wave of industry
mega-growth will come
from the advancement
of the classic art of
storytelling
Context creates auras and aspirations that help drive marketer
interests.

73. Stories around brands, products
It's not just a race to get to the highest number of
fans. It's a race to figure out how to be the most
engaging storyteller with your fans."
Carolyn Everson
VP, Global Marketing Solutions
Facebook

74. In the future, digital ads will
be highly personalized. They'll
appear on mobile devices in
sophisticated ways. If you
want to share an ad with
friends, you can, and if you
want to skip it, well, go right
ahead.

75. Preparing yourself

76. Marketing jobs of the future
Roles that didn’t exist 5 years ago:
• User Experience Designer
• Online Community Manager
• Creative Technologist

77. My humble advice to future “Ad Men”
• The planner of the future
– Take an anthropology course
• The creative of the future
– Take a computer science course
• The media buyer of the future
– Take a statistics course

78. Thank you.
Jose Villa
@jrvilla
President
Sensis www.linkedin.com/in/josevilla
T: (213) 341-0171 www.thinkmulticultural.com
E: jrvilla@sensisagency.com
www.sensisbureau.com