ad networks panel reach vs niche
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Jefferies & Company, Inc.
Jefferies 4th Annual Internet Conference
February 27, 2008
CONFIDENTIAL DRAFT
Member, SIPC
Ad Networks Panel: Reach vs. Niche - the Conversion Game
Panelists
Casper Seifert
CFO
David Liu
Managing Director Internet & Digital Media Group
John Ardis
VP, Corporate Strategy
Don Mathis
President
Art Shaw
CEO
Panelists are leaders in the online advertising network and related services industry
CPM, CPC, CPA International, Domestic Owned vs. represented
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Sector Snapshot
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2005 2006 2007 2008 2009 2010
What is the Online Advertising Opportunity?
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46
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2005 2006 2007 2008 2009 2010
Global Online Advertising Revenue, 2005-2010E1 US Online Advertising Expenditure, 2005-2010E1
(1) Source: Jefferies Research, 2007.
($ billions) ($ billions)
22% CAGR
22% CAGR
3
How Are Advertisers Spending Their Money?
(1) Source: IAB.
Advertising Spend Allocation – Q2 20071
Display Ads21%
Sponsorship3%
Classifieds17%Search
41%
Lead Generation
8%Rich Media
7%
Broadband Video
1%
E-mail2%
CPM45%
Performance50%
Hybrid5%
4
Note: Public companies labeled black; private companies labeled blue.(1) Source: comScore Media Metrix, February 2008.* January 2007 statistics not available – Yahoo! Network growth from November 2007; Google Ad Network growth from July 2007; Specific Media growth from February 2007.
Who are the Advertising Network Players?
(millions)
Total Unique Visitors – January 20081
Role of Ad Networks Marketplace matching
advertisers and Website publishers
For Advertisers Outsourced placement
and distribution of ads Create, plan, optimize,
and report campaigns Broad reach and price
economies of scale
For Publishers Cost-effective means
of selling inventory Handle payment,
processing: “love those checks!”
95.398.4102.1
121.9131.8137.5142.3143.2
155.8166.8
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Meet the Panelists
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John ArdisVP, Corporate Strategy
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Display/Rich Media/Video Advertising CPA Lead/Action Generation Programs Behavioral Marketing
Third-Party & Site-Side Ad Serving Email Management Advertising Management Software
Affiliate Marketing Services Managed Search Services CPA Media Programs
Integrated Interactive Services
ValueClick, Inc. is literally the only online marketing services provider who covers all online marketing channels in-house, in volume and with 10 years experience in doing so
Comparison Shopping Mobile Comparison Shopping Consumer Reviews
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AWARENESSAWARENESS LEADSLEADS SALESSALES CRMCRM
Email MarketingEmail Marketing
CPL/CPA ProgramsCPL/CPA Programs
Display/Rich Media/VideoDisplay/Rich Media/Video
Behavioral MarketingBehavioral Marketing
Technology (Ad Serving, Email Deployment)Technology (Ad Serving, Email Deployment)
Affiliate MarketingAffiliate Marketing
Search MarketingSearch Marketing
Covering All Client Objectives
Comparison ShoppingComparison Shopping
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• #1 independent online display ad network○ Reaching ~75% of U.S. Internet audience each month
• #1 lead-generation provider in U.S.○ Generating millions of qualified multi-channel leads each month
• #1 in Affiliate Marketing globally○ More than 45% of top 500 online retailers with 3rd-party affiliate
program – more than next two providers combined○ Billions in ecommerce transactions enabled each year
• #1 independent advertising technology provider
• #4 consumer comparison shopping properties
• 5,000+ clients worldwide
ValueClick by the Numbers
Don MathisPresident
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Don Mathis
President
February 2008
• Company snapshotCompany snapshot
– Strong revenues / highly profitableStrong revenues / highly profitable
– Reach = 75% of addressable InternetReach = 75% of addressable Internet
– Patent-Pending proprietary technology -- Display Ad Patent-Pending proprietary technology -- Display Ad Serving/Optimization/Targeting and SearchServing/Optimization/Targeting and Search
– 30,000+ Websites, search partners and email publishers30,000+ Websites, search partners and email publishers
• Core Revenue model: Cost Per Action / Direct ResponseCore Revenue model: Cost Per Action / Direct Response
– CPA is only pure “performance based” advertisingCPA is only pure “performance based” advertising
– Measurable ROIMeasurable ROI
– Strong “down market” characteristicsStrong “down market” characteristics
– Little advertiser risk / deep advertiser integrationLittle advertiser risk / deep advertiser integration
A Performance-based Ad NetworkA Performance-based Ad Network
CPA Performance Marketing: The Nexus of CPA Performance Marketing: The Nexus of AcquisitionAcquisition and and ConversionConversion
DiscoveryIdentify the Right Inventory /
Mine the Torso & Tail
Price Point Management
Pay the Right Price
Offer TestingCreate the Conversion
ConsumersPoint of Inspiration
ActionPoint of Fulfillment
AcquisitionAcquisition
• Technology-drivenTechnology-driven• Via the Publisher NetworkVia the Publisher Network• Via in-house search & Via in-house search & media buyingmedia buying
ConversionConversion
• Technology-enabledTechnology-enabled• Via in-house creative teamVia in-house creative team• Via rigorous testingVia rigorous testing• Mini-site developmentMini-site development
National AdvertisersSmall/Local Advertisers
Self Serve Self Serve (Ad Center)(Ad Center)
In-house Agency In-house Agency ServicesServices
Outside AdOutside AdAgenciesAgencies
DATA-LAYER: OPTIMIZATION & TARGETING
Behavioral / Contextual / Geographic / Demographic / Time of DayBehavioral / Contextual / Geographic / Demographic / Time of Day
AD TYPE:AD TYPE:
TECHNOLOGY:TECHNOLOGY:
““ENTRY POINT”:ENTRY POINT”:
IN-HOUSE OR IN-HOUSE OR NETWORK?:NETWORK?:
Text AdsText Ads Coupon AdsCoupon Ads
SearchSearch DisplayDisplay EmailEmail
Widget/AppsWidget/Apps VideoVideo
Casper SeifertCFO
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TradeDoubler generates over € 300 Million in revenue for our customers each
month
Independent market leading solutions within Affiliate,
Campaigns, Search and Technology
Over 12 Billion impressions and 7.6 Million leads
per month
Unrivalled experience with
presence in Europe and
Japan
TradeDoubler in brief
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The strategic assets
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An extensive pan-European network
of advertisers and publishers
Local presence in 18 European
Countries and Japan
Proven and flexibletechnolgy
platform supportingbusiness model
Superiorknowledge in
online marketing
Independent internetmarketing solutions
provider
Products in Search, Technology, Campaigns
and Affiliate. Covering +80% of
total online adspend
Our Business
”To redefine the marketing landscape."
” We create results
Through our knowledge
For advertisers, publishers and agencies
Globally
Through marketing technology"
Vision Mission
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Art ShawCEO
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Media Business Search
Ad Network
Media and Monetization Company
© 2008 Connexus Corporation. All Rights Reserved. The contents of this document are proprietary and confidential.
Domain portfolio
• 700,000+ generic domain names
• 99% organic, type-in traffic
• Optimize URL parsing, template, content
Search assistant software
• Keyword search through address bar
• Broad reach of consumer households
Media properties
• Original editorial content
• SEO-optimized
© 2008 Connexus Corporation. All Rights Reserved. The contents of this document are proprietary and confidential.
Powerful optimization and delivery – Demographics– Psychographics– Purchase behavior– Ad views, clicks and conversions
Supports all ad types, sizes, formats
© 2008 Connexus Corporation. All Rights Reserved. The contents of this document are proprietary and confidential.
Drag-and-drop form builder
Web development services
Conversion path optimization
Lead scrubbing, validation, de-duplication and real-time delivery
Male, 33, single HHI $50k, ZIP 10583Owns iPhoneLikes Coldplay, RadioheadLight drinkerFemale, 28, married w/ kidsHHI $160k, ZIP 60647Good creditConcerned about car safetyVisited DVD review site
Audience Profiles Form Builder Custom Form
Platform scales to any product, service or business, national or local
Local exchange
Advertisers bid for highly qualified, relevant leads
Consumers protected with full privacy
Publisher captures search revenue
© 2008 Connexus Corporation. All Rights Reserved. The contents of this document are proprietary and confidential.
Dave’s Top Five
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Dave’s Top Five
2002
2003
2004
2005
2006
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20071. If you could LONG or SHORT any stock to exploit the
next phase of advertising networks what would it be?
2. Weakening economy: near-term impact? Long-term impact?
3. Thoughts on these ad networks making news?
Newspapers (Gannett, Tribune, Hearst, NYTimes)
Cable (Comcast)
Female (Glam)
4. Microsoft acquires Yahoo, who wins? Who loses?
Google/DoubleClick?
5. What are the fundamental advantages and disadvantages of broad reach versus deep niche expertise?
Dave’s Top Five Back-up
1. Is Facebook worth $15BN?
2. Isn’t international where all the action will be in 2008?
3. Is conversion enhanced by combining both “reach” and “niche” capabilities?
4. Will all advertising go performance based?
5. What is the role of the vertical/niche ad networks?
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2002
2003
2004
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2007
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