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Transcript
Chapter 6
Display Advertising and Other Customer Acquisition Techniques
Learning Objectives:
By the time students complete this chapter they should be able to:
 Explain the meaning and importance of customer acquisition as a marketing strategy.
 List the major customer acquisition techniques, both online and offline.
 Identify the major online advertising formats.
 Explain ad serving and how ad serving networks are used to target online ads.
 Identify the most common methods of targeting.
 Explain the various types of behavioral targeting.
 Discuss the benefits and drawbacks of advertising on Facebook, LinkedIn, and other
social media networks.
 Define event marketing, publicity, affiliate marketing, and portal sponsorships.
Chapter Perspective
This chapter has changed a great deal from the second edition, due to broadband connectivity
that permits new, more interactive formats and to better marketer understanding of how to use
display (synonymous with banner) advertising. We all see a great deal of online display
advertising on a daily basis, but most of us probably pay little attention. Like mass media
advertising, we have become desensitized because of the volume of ads we see. That is a good
time to get students to pause and pay attention; there is a lot to be learned from observation.
Internet Customer Acquisition Tools
This is essentially the graphic used in both earlier editions with the addition of social media
marketing. Two points are important:
1. Internet marketing has become so complex, so detailed, that email, search and social
media marketing have all been given their own chapters in this edition. Their size, as
represented by the portion of marketing budgets accounted for in Figure 6.2, warrants the
expanded treatment. So does the increasing complexity of executing in each context.
2. The tools listed can all be used for acquisition. Some are more effective for other uses.
Email for customer retention is the prime example.
Online Advertising
Online advertising has become a part of the promotional mix of most companies, and both its
absolute amount (6.2 a) and its percentage of the total continue to grow (6.2 b). Figure 6.2 (c)
shows the number of tools that can be included under the heading on online advertising. Figure
6.2 (d) shows that the percentage accounted for by advertising on social networks, as well as by
gaming there, is increasing globally at a rapid pace.
Figure 6.3 returns to an issue from Chapter 5; different tools—in this case online advertising—
work better at different stages of the branding process. That can’t be overemphasized and
students should be beginning to understand just how complex the planning and execution of
online advertising can be.
Display advertising, both offline and online, tends to be the standard to which all other
advertising is compared. Figure 6.4 points out that display and search are relatively close in
expenditure but that display advertising has been gaining in recent years. Search advertising is
popular because it works, in a direct-response sense. Has display advertising been gaining
because of the new, more interactive formats mentioned in Chapter 5 and discussed later in this
chapter? Probably so.
Figure 6.5 gives the basic formats. At this point students should recognize the Internet
Advertising Bureau as the trade association responsible for standards that make it possible to
create and place ads across the Internet. Without standardization of formats, all would be chaos.
The IAB Guidelines page has consolidated all the formats and links:
http://www.iab.net/guidelines/508676/508767/displayguidelines. They have already changed the
name of Rising Stars to Rich Media Branding Units, indicating acceptance by the industry. Each
format is linked to an example and detailed specifications. It is worth students knowing where to
access this information.
It will be harder to find the New Rich Media Branding Units, so you may want to assign
Interactive Exercise 6.2 or use it in an exploration of the IAB guidelines.
If you have time, it is fun to go to a major portal page or content site and look to see what
formats are used. A newspaper site is a good example; online advertising is becoming the lifeline
of the struggling newspaper industry and even small local publications tend to do a good job of
servicing advertisers. It is also a chance to make the point that not all sites, even the largest ones,
accept all ad formats. Google’s DoubleClick Studio is a good place to see sample ad formats
from numerous brands and it could be used as a pre-class assignment:
http://studio.doubleclick.com. There are case studies and tools that could be used in various
ways, in class and out.
Best practices for rich media (all) online ads include:









Do your research.
Keep it simple.
Tell a compelling story.
Have an effective call to action.
Make sure the landing page and the website make it easy to take the action. This is the
subject of Chapter 10, but it is worth emphasizing now.
Keep the file size small so the ad will load smoothly and quickly.
Have a strong, attention-getting headline.
Choose colors that are appropriate for the sites on which your ad will appear.
Choose sites that are appropriate for your target audience.

Conduct tests of your ads on a continuous basis.
When you look at that list, is it really different from best practices for developing offline display
ads?
Online Ad Serving and Targeting
It is also worth taking some time to get students to try to verbalize their understanding of ad
serving, which is usually pretty vague. I keep looking for a good definition and switched to this
one from PC Magazine for in the new edition:
The hardware, software and personnel required to deliver advertisements to websites and adsupported software. It also includes the monitoring of click-throughs and required reporting to
the ad purchasers and website publishers.
When you add their definition of an ad network it hopefully begins to make sense.
Internet advertising organizations [that] act as a middleman between the advertiser and the
Internet venues that display the ads. They sell the online campaign to the advertisers and then
deliver the ads to the sites that display them. The site owners receive a royalty based typically on
the number of times users click the ads.
If I had found a really good image to help explain the concept I would have used it. You might
try this one: http://ianthomas.typepad.com/.a/6a00d8341bf6d253ef010535ed18fd970b-pi. If you
find anything better, do post a link on the Google+ site!
Targeting
Figure 6.9 lists the kinds of targeting. Demographic and Geographic are traditional segmentation/
targeting criteria. Contextual will be covered in the context of search. Channel sounds unique to
the Internet—people who watch YouTube is one example—but if you stop to think about it,
that’s not a lot different from targeting people who read GQ Magazine, for example. Retargeting
is unique because of the data element, and it is part of behavioral. We put emphasis on that as a
targeting method both from the belief that it is the most effective and also because it is the most
controversial. Students really need to understand both the upsides and the downsides. The
privacy implications are dealt with in Chapter 15 but mostly in the context of privacy in general.
The three kinds of targeting are:
1. Targeting identified users
2. Targeting unidentified users
3. Targeting with predictive models (which is can be used with either 1 or 2)
This is worth spending time on. You can start by asking students to identify the ways in which
sites can identify their users. The fact that sites can then contact or direct ads to profile
information is understandable and it helps to set the stage.
Understanding how sites can track and target anonymous users takes more effort. Figure 6.10
should be helpful, but it may not answer all student issues. They have to understand cookies.
Again, I’ve never found a perfect image, but this one explains the basic issues:
http://www.jaberson.com/internet-cookie-files-explained. This one then gets the issue of
persistent vs. session cookies: http://blog.wisefaq.com/wpcontent/uploads/2009/12/cookieprocessing.jpg. Again, if you find or develop better ones, let us
know! I don’t think there’s any way to get this material across except to talk about it at length,
asking the students questions and answering theirs.
There are other types of targeting of anonymous users listed. To the best of my knowledge, none
are in widespread use, but who knows what the figure holds.
Targeting with predictive models takes us back to Chapter 4 and that link should be made.
Again, it’s not something that’s easy for a lot of students to understand, so it doesn’t hurt to
spend some more time on it. Akamai is used as an example, but they are not particularly good at
explaining anything in layman’s language. Infosys has a good white paper about predictive
banking which is interesting and has good graphics. They’ve posted it so it’s difficult to get a
link; here’s a link to the Google Docs version or search predictive banking.
https://docs.google.com/viewer?a=v&q=cache:_qE3_iaALQJ:www.infosys.com/finacle/finacleconnect/Documents/issue06/tech.doc+&hl=en&gl=us&pid=bl&srcid=ADGEESi1wTfeVo42h9QSGOdLl45VfwqtkG_JW
rL0276TFvaDL6KAxx7LMEJSwUl4BUwmyskit5AN7nZcDfrkz3REcSTYgF1tlJzkpm1ZezbBa6
rkxgXaq3gDKIhRnC_VAU48cypwZoh&sig=AHIEtbTVqpVlhHtWRE1mmq0f-8P4_FdSUQ
This would make a good case study if you can afford to spend that much time.
And as you end your discussion, it’s worth asking students if they are now more aware—more
concerned?—about the amount of data companies hold about them.
Targeting on vertical networks seems to generally make sense to students. Looking at the Glam
Media page in Figure 6.11 pretty much identifies the target audience. We couldn’t show the CBS
Sports Network (they put all the college logos on a banner at the top of the page, making it an
intellectual property disaster) but you can get an image and show it. The contrast is good and
their home page reinforces the importance of ad formats:
http://collegenetwork.cbssports.com/departments/advertising.
There are many opportunities for advertising on social networks. Many blogs accept advertising
and the Bargain Briana blog shown in Figure 6.12 is a hoot, but the attraction for advertisers is
obvious. Note that Google is advertising on the home page in this shot.
Once again, Facebook is the 800-pound gorilla in the space. You might want to search for recent
data on expenditures on Facebook advertising; it just seems to continue to grow. The text
explains the process of creating a Facebook ad. Facebook has a tutorial on this page, but it’s not
very detailed: http://www.facebook.com/business. It is worth taking some time to create an ad in
class or to assign students to do one outside of class so they can report on it. It’s of course a bit
tricky to do it in front of an audience, so be sure you have a jpeg image handy and have practiced
so you can make the point you want to make. This section doesn’t cover bidding for Facebook
keywords. If you get that far in the ad creation process you can point out that all keyword
bidding is similar and Google AdWords will be discussed in detail in Chapter 8.
The process on LinkedIn is similar: http://www.linkedin.com/advertising.
Miscellaneous Acquisition Techniques
These miscellaneous techniques are given relatively brief treatment. You can add examples, case
histories that emphasize tools you consider particularly important.
Marketing Events and Event-Triggered Marketing
Events such as trade shows have always been important in some marketing sectors. Are they
making a comeback across the board as a result of the ability to better reach, better target
customers? Perhaps.
The consumer event portrayed in Figure 6.14 is one example. I am particularly fond of one my
students attended in early 2001 in Boston: http://diymarketing.blogspot.com/2011/11/timberland-aces-social-media.html. The blog post has a link to
their Facebook tab page for the event. If it’s still up it is excellent. It also has a video which was
used as a followup. It was a customers-only event with the invitations going out by email.
A Cisco virtual product launch is described in Chapter 9. B2B Online has an Events page where
you can find more examples: http://www.btobonline.com/section/b2b_event_marketing. Just
search Twestival for all kinds of nonprofit events.
Publicity
Public relations activities find a great deal of support on the web. Figure 6.15 shows a template
for a social media press release. I can’t see why any business would do anything else, although
perhaps not everything here. We weren’t allowed to show an actual press release for reasons that
escape me but you can find your own. The Ford Media Center has a lot of information, plus
feeds, on the home page: http://media.ford.com/news. Individual press releases have various
characteristics; all include suggestions for tags when content is published. This release even has
a QR code: http://media.ford.com/article_display.cfm?article_id=35844.
Affiliate Programs
Affiliate programs were a huge deal in the early days of the Internet when everyone thought they
were going to make a lot of money doing everything. In a more sober world affiliate programs
can be useful. If they are automated like Amazon’s they are scalable and don’t have to worry
about the 80%. They can just cultivate the 20% (or less): https://affiliate-program.amazon.com.
Portal Relationships
The same early popularity accrued to portal deals. They are a minor element of Internet programs
at present. AOL is said to still offer portal sponsorships, but the trouble is that it’s hard to
identify them. Should they just be considered sponsorships and drop the portal tie? Probably.
Or is it the amount charged on home pages like Yahoo! and YouTube? Facebook began to offer
a display ad opportunity in early 2012. They are “log-out ads;” visitors only see them if they log
out of Facebook. Cost for all log-out ads for a single day was rumored to be around $700,000
and they were not available separately, but as part of premium packages. This article suggests
that Ad Age considers home page ads on portals to be portal ads, which may mean that the old
terminology of portal deals is no longer viable: http://adage.com/article/digital/facebook-setshigh-price-log-ads-700k-aday/233686/?utm_source=digital_email&utm_medium=newsletter&utm_campaign=adage.
Viral Marketing
Viral marketing doesn’t get much treatment in this text because it’s difficult (impossible?) to
create something and “make it go viral.” It does or it doesn’t and marketers have little control. I
tell my students never to promise their boss that they will create a viral item; it’s careerthreatening. That’s in spite of what you read giving pointers on how to make something go viral.
That’s all they are, pointers. That said, you can think about the current viral rage—at this
moment it’s KONY 2012—and either visit it in class or assign it to be reviewed outside class and
discuss it as a case history. There will be reasons why it went viral, but, again, few of those are
controllable.
Marketers should be vigilant so that the less ethical among them do not cause irreparable harm to
user trust in the Internet as a medium. We will return to this important subject in Chapter 13
when we focus specifically on social and regulatory issues.
Discussion Questions
1. True or False: All businesses need to create a steady flow of new customers as part of
their marketing strategy. Explain your answer.
True. In spite of the greater ROI of CRM, customers do leave for a variety of reasons, some of
which marketers can affect and some of which they cannot. I like to use diapers as an example.
Of course, the diaper makers have long ago figured this out and have other products waiting in
the wings. If they have an email address and the baby’s birthdate, the marketing opportunities are
obvious.
2. Identify the main customer acquisition tools.
The tools listed are:








Advertising, both online and offline
Events, PR
Email
SEM
SMM
Affiliate programs
Portal deals (sponsorship?)
Viral marketing
It is generally agreed that email and SEM are better at retention than acquisition, but they do
have viable uses, especially when you can reach the contacts of your followers on social
networks.
3. What is online display advertising, and how does it relate to offline display advertising?
Display advertising is often referred to as banner advertising but I use display because that
covers advertising both online and offline. The basic definition in both contexts is that it includes
both images and text. Online has the huge advantage of potential interactivity in the ad itself and
the ability to link directly to the product in question.
4. What is an online ad format? Why must marketers be familiar with the formats and
understand what creating an online ad requires?
The online ad formats describe elements like size in pixels, maximum file size, interactive
elements allowed and more. Why? Because it isn’t easy. There’s a certain amount of tech
understanding that is required along with all the understanding of audiences, messages, and other
communications issues that also apply in offline display advertising. If you showed the CBS
College Sports Network home page, it showed clearly that not all sites offer all formats and this
has to be taken into account in both planning and creation of online ads.
5. What is a rich media ad? What benefits does it offer the marketer? Does it have any
potential downsides?
Rich media is anything that is not static—animation, audio, and video, primarily. Early IAB
studies referenced in the second edition showed that use of rich media can lead to more attention
and more response. They are touted as creating more audience engagement.
6. Why were additional new ad formats developed? What benefits do they offer the
marketer? Do any of the formats have any potential downsides?
That question was answered in the branding section of Chapter 5 and it is good to tie it back.
Marketers want more engaging ad formats, otherwise they can just keep putting static ads in
newspapers and magazines. So rich media came first and then “rich media on steroids”—the new
Rich Media Branding Units.
7. How does a marketer go about placing an ad on Facebook or LinkedIn?
Basically, you sign in and follow the directions/fill out the forms provided and your ad is created.
It has to be paid for, of course, and has to be approved by the site owner. That obviously
completely ignores the difficulty of creating compelling advertising with brief text and limited
images. It’s important for students to realize that these, like Google AdWords, are self service,
but it’s also important for them to realize how complex and difficult it is to do them well.
8. Why is ad serving an improvement over just placing an ad on a web page and just
leaving it there?
On local sites you sometimes do see ads that have been purchased for a long period of time and
the content has not been modified during that time. I refer to them as “wallpaper.”
To answer the question directly, the ad serving networks have a greater reach than a single
marketer could achieve with a media buy and they are likely to have more sophisticated targeting
methods. It wasn’t emphasized in this chapter, but they also provide results in essentially real
time, allowing marketers to tweak ads during a campaign.
9. Behavioral ad targeting is especially important on the Internet. Explain why and give a
hypothetical example, perhaps based on your own experience.
Can marketers do specific behavioral targeting—I just looked at shoes on a site—in mass media?
No, they cannot come close to the rich behavioral data available on the web. Privacy issues are
real, but if marketers do not use some variant of behavioral targeting they are missing out on a
chief benefit of online advertising.
If you use Gmail, an easy example is to capture ads, and the other links at the bottom, on the
basis of one of your emails. Just be careful what you choose!
10. Is demographic or behavioral or contextual advertising a better way to precisely target
website visitors?
Behavioral is almost invariably better.
It’s easy for me to use myself as an example because a lot of people in my demographic don’t
use the web for extensive shopping, online bill paying, and mobile apps. On the other hand, quite
a few of us do engage in these behaviors, regardless of our advanced demographic, and that’s
what’s important.
Try to get your students to think about a demographic cohort, maybe their own, and the fact that
members of that cohort behave differently in terms of various Internet-related activities. It’s
important to target what they do, not how old they are.
11. True or False. Marketing events are necessarily held in the physical world, but they
can be promoted on the Internet. Explain your answer.
As stated, it’s False. Marketing events can be held on the Internet. In either event, the Internet is
an excellent place for promotion them; email to the customer list and display advertising to
attract new potential customers, for example.
12. Discuss whether or not generating publicity is one of the few marketing
communications activities that has not changed much as a result of the Internet.
It actually has changed a great deal. It used to be much more a matter of personal contact and
persuasion between marketer and writer. Now it is a matter of providing the writer all the rich
media and other content they need to write an article or blog post. Feeds and email notifications
are used to draw the attention of writers to the content available.
13. Do affiliate programs tend to attract many websites or blogs that can generate a large
volume of traffic that results in sales? Why or why not?
Some sites do well from their affiliate programs, but the 80/20 rule invariably applies. T-shirt
site CafePress seems to have a good one; it at least has a good description:
http://www.cafepress.com/content/cp-partners. There are several directories of affiliate programs
for site owners who want to make some extra money. A site called Affiliate Ranker has an
interesting search engine: http://affiliateranker.com.
14. What is the importance of portal deals to Internet sites today?
As explained in the text above, the importance of traditional portal deals has declined since the
early Internet days. However, as additional sites like Facebook achieve “portal” status, the
importance of expensive portal ads may become greater.
Internet Exercises
1. Internet Career Builder Exercise.
2. Visit a website you go to often, paying attention to the advertising this time. What kinds
of ads do you see and why do you think they were placed on this particular site? Close
out of the site and come back several times in quick succession. What do you see going
on with the ads? How does it illustrate concepts discussed in the chapter?
If you do this in class or assign students to do the exercise outside of class, specific spaces
reserved for specific ad formats should be obvious. Different ads are likely to appear in these
spaces for each of several specific reloads. They will hopefully see ads with content that is
appropriate for the target audience of the site and that have interactivity that can engage the
viewer and content that is compelling enough to create a click through.
3. If you have not already done so, make a contact with one of the three websites you are
tracking. You could register, ask for information, or even purchase a product if you
wish. Think about the experience you have as you interact with the website. Then keep
a log of contacts that are made because of your initiative. How does the site appear to be
using the data from your contact(s)?
The first part of the question is intended to get students to think about customer experience in
particular and site usability (to be discussed in Chapter 12s and 14) in particular. Students will
know a poor experience when they see it, and the discussions are interesting.
If sites immediately send a welcome email and then follow with a planned program of
communications, good for them. It is amazing how many sites still do not do the basics well, and
a class discussion should uncover both good practices and lack of attention to a new registrant
and poor use of the person’s data.
4. Visit the website of your local newspaper. Carefully examine the online media kit to
understand what they offer that is the same as or different from the ad formats
described in this chapter. Try your hand at developing an ad for one of the available
formats.
Especially f you don’t go live to a media kit in class, I’d recommend assigning this exercise.
Assuming it’s a reasonable size market, the paper probably has a good media kit, although it may
have fewer options than, say, the New York Times Online media kit:
http://nytmarketing.whsites.net/mediakit. It has rates for print ads by section and specs for online
ads by section. Unfortunately it no longer seems to have online rates. The reason is that they
want to sell packages, not individual formats. Smaller local papers sometimes have online rates;
it’s worth checking yours.
Trying to mock up an ad is an exercise in how hard it actually is to get it right. If the media kit
doesn’t specify the maximum file size, the IAB standards give them. Most of us try to put way
too much content in ads when we first try our hand at it.
Key Terms
80/20 rule rule of thumb that states that 20 percent of a phenomenon (customers) tends to
produce 80 percent of the results (profits); also known as the Pareto curve.
ad serving process of supplying advertising elements while a page is loading on a user’s
browser; ads are served by an advertising network and are placed on the basis of user
profiles.
affiliate program a website that agrees to post a link to a transactional site in return for a
commission on sales made as a direct result of the link.
behavioral targeting advertising displayed on the basis of anonymous Internet user profiles.
contextual advertising ads that are displayed based on the content being viewed at the time.
cookie a few lines of code that a website places on a user’s computer to return data about the
user’s activities to the site
display advertising advertising that includes both text and visuals.
portal a large site with multiple services, ranging from news to directories to searches, that acts
as an entry point onto the Internet.
re-targeting behaviorally targeting an ad to a person who looked at a product but did not
complete a transaction.
rich media combination of text, images, video, and other interactive elements.
vertical advertising network ad serving network that specializes in a particular audience, for
example B2B or women with young children.