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Digital Interactive Media.ppt

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									Digital Interactive Media

    Advertising & Media
     Returning power to the
• Before radio and TV
  – Direct appeals to consumer
• TV advertising
  – Passive consumer
• Cable TV, DVR’s, Internet
  – Consumers choose where and when to
    view content and advertising
     Merging of content and
• When is it content and when is it an
  – Consumer can be actively engaged
  – Barnes and Nobel’s site
  – Product based games
             The Internet
• Dominant form of digital interactive
  – 1996 - $300 million in Internet advertising
  – 2000 - $8.2 billion in Internet advertising
  – By 2011 (according to eMarketer) - $36.5
    billion in Internet advertising
 Traditional media vs. the Internet

• Centralized network
  – Content is distributed from a centralized
    • TV station, newspaper, etc.
• Decentralized network
  – Content is distributed via various hubs
    and links
  Other important differences
• Space on the Internet is vast and
• Time (TV and radio) and space (print)
  are limited and expensive
• Consumers are receivers, creators,
  and arbiters of content on the Internet
Key components of the Internet
• Portals – sites that attempt to provide
  a broad array of content and services
  – Designed to keep users on the portal
  – Create opportunities for advertising and
    fee-based content
  – Yahoo is industry leader
• Social networking sites – electronically
  linked social interaction
      More key components
• Cookies – tracking devices
• Search engine – allow users to search
  for websites based on keyword
• Google dominates with 49.2% of the
  – Revenue generated through AdWords
    and AdSense
  – Sponsored links at the top of a search
    results page are purchased
• Sponsored links on the side of a
  search results page
  – Performance based, pay-per-click model
     • Advertisers only pay Google when the user
       clicks on the link
  – Pricing is determined by an auction where
    companies can bid for keywords used in
    the search
     • Higher bids lead to higher placement
     • Effective ads receive higher placement
• Web sites set aside a portion of their
  pages for Google text ads
• Google software selects and inserts
  ads without input from the host site
  – Attempt to insert ads that are relevant to
    the host site content
• Revenue is generated on a pay-per-
  click model and is shared with the host
Internet use is a global phenomenon

    Geographic Internet Usage (% of population)
                                       2006     2008




                                              21.3                                       21.9
                      15.1                                        14.4                15.7
                9.9                     9.6
Who accesses the Internet?
         Demographics of American Internet Users, 2006 (%)
      % Who Use the Internet          Community Type             Race/Ethnicity        Educational Attainment

                                                            White, non-              Less than
Total Adults                   73 Urban                  75 Hispanic              73 high school           40

                                                            Black, non-
Men                            71 Suburban               75 Hispanic              61 High School           64

                                                            speaking                 Some
Women                          74 Rural                  63 Hispanic              76 College               88
                                                              Type of Connection at
               Age                   Annual Income ($)                Home          College +              91
18-29                          88 < 30,000               53 Dial-up               34

30-49                          84 49,999                 80 High-speed            62

50-64                          71 74,999                 86
65+                            32 75,000+                91
   How do companies advertise?
                                     Email     Interstitial
                     Slotting Fees
                                      2%           2%
              Rich Media
   9%                                        Banners &
                                               18%                 Referrals

       28%                                         Search Engine

   Percent of Internet Ad Revenues by Type of Advertising,
               Web Sites
• Most companies have developed
  some form of online presence
  – Can view web site as an ad
  – Extended brochure
  – Online catalog
  – Information and entertainment
Other forms of Internet advertising
• Banners – small billboard across the
  top or bottom of a web page
• Skyscraper – a vertical ad that
  appears on one side of a page
  – Users can click on these to go to the
    advertisers web site
• Pricing is becoming standardized
  through the IAB (interactive advertising
Other forms of Internet Advertising
• Buttons – smaller versions of the
  banner that look like icons
• Text links – hypertext embedded within
  stories or articles
• Rich media advertising – include
  graphical animations, audio and video
• Interstitial – ads that play between
  pages on a Web site
Other forms of Internet Advertising
• Rich mail – multimedia email
• Sponsorships – corporations sponsor
  entire sections or single events on a
  web page
• Classified ad Web sites – e.g. Craig’s
• E-mail advertising – 77% sent to
  consumers who requested it
  – Spam – electronic junk mail
           Viral marketing
• Internet version of word of mouth
  advertising(?) via email
• Encourage satisfied customers to
  recommend product/service to friends
  – Provide incentives to consumers for
• Can refer friends to advertiser games
  and experiences
  – BKs subservient chicken, for example
Benefits of Internet Advertising
•   Interactive
•   Large and growing audience
•   Immediate response
•   Highly selective targeting
•   Proximity to purchase
    – Virtual storefronts
• Affluent market
• Reaches users at home and at work
 Disadvantages of Internet advertising

• Medium in not standardized
• High targeting costs
• Slow downloads due to limited
• Security and privacy concerns
• Global infrastructure limitations
  hamper effectiveness
     Measuring ad viewership
• Ad impression – counts the number of
  times an ad is called to appear on a
  web page
  – Consumer may never see the ad
• Click rate – counts when a visitor
  clicks on an ad
   Purchasing time and space
• On average, 6.5% of advertising
  budget is spent on interactive media
• Purchase ads directly
• Ad networks serve as brokers for
  advertisers and Web sites
     Other Interactive Media
• Kiosk – computer for specific users,
  for a specific purpose
  – Owned and controlled and operated by its
  – Located in malls, retail stores and other
    public places
     • Close to the purchasing location
  – In store catalogs, coupons, DVD rentals,
    rick sales, local information, etc.
  – ATMs
     Other Interactive Media
• Interactive TV – allows viewers to
  interact with television content as they
  view it
  – A TV with a return path – information
    flows to the viewer or back to broadcaster
  – Programming links to web sites,
    commerce, surveys, distance learning
      Cell Phone Advertisers
• Cell phone providers have been
  reluctant to include advertising
• Ads can be placed on the deck
  – The page users see when they access
    the Internet from their phone
• Providers are considering offering
  lower rate plans that include

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