Ad effect measurement compares the results of an advertising activity in relation to its purpose. The purpose of an ad varies from “impro...
Ad effect measurement compares the results of an advertising activity in relation to its purpose.
The purpose of an ad varies from “improving recognition” or branding (the company or product name) to “enhancing sales promotions” (by inducing customers to the website for using a service or buying a product), however, the final purpose should be “increasing the sales and profits.”
As a web analytics consultant, you have to know how to measure the effect of online advertising. Online ad effect measurement requires not only analysis of the access log data of the website but also analysis of various data types such as the access log on the ad server. You also need to understand the characteristics of each type of data.
The following explains how to understand the flow of ad effect measurement and how to use major indices. While there are some exceptions for newsletter ads and affiliate ads, the basic user flow and indices are the same.
Impressions for a listing ad can be a hint as to how often the target keyword is searched for.
Click rate (%) = (Clicks on ad / Impressions on ad) x 100
There are different reasons why the number of impressions might be smaller than you expected them to be. The problem might be the medium chosen to publish the ad or even the wrong keyword. Think about changing these factors if your website is not as popular as you were expecting it to be.
The beacon count method embeds a beacon or tag (e.g., 1- x 1-pixel transparent GIF request) in the ad and the ad server counts the requests made by the beacon as an impression.
While TVs and radios have audience and program ratings and newspapers and magazines have circulation and reading rates as their indices, there is no index to measure the ad display itself. For an Internet ad, the ad exposure rate can be understood more accurately by measuring how many times the ad (e.g., banner image or text) was displayed.
The word mille is a Latin word that means “1,000.”
Conventionally, CPM was mainly used by banner ads on leading portal websites, however, it has been used increasingly more often by ad networks. Since ad networks occasionally use CPM to calculate how much they charge, cases where CPM is used as the index even for a small-scale ad are increasing.
CPM = ad cost/impressions÷1000
As an advertiser, you will not only need to develop relationships with potential customers, but also with referrer sites. If your ad is not shown on a referrer site, your inflow will noticeably decrease.
Basically, multiple clicks during the same visit are regarded as one click and, in many cases, CTR has the same meaning as sessions. It can be counted as visits to a website from an ad.
CTR(%) = (Clicks on Ad/ Display of Ad) x 100 = (Clicks / Impressions) x100
For example, assume that a banner ad was published on website and then displayed 10,000 times. If this ad was clicked 100 times, the CTR is 1%. You can consider CTR as website visits.
One of the important purposes of Internet ads is to acquire visitors to your website and this is called the traffic effect. CTR is the index used to measure the traffic effect.
The higher the CTR, the higher the traffic effect, meaning that many visitors are coming to the website. Therefore, improving the CTR is necessary in an ad campaign.
A higher CTR means that the displayed ad is more likely to be clicked.
When measuring CTR, an ad server (a server dedicated to distributing ads) and an ad effect measurement program will not count duplicated clicks. For example, multiple clicks during a single session or within a particular period of time are counted as 1.
For some listing ads, unjust clicks are not counted. This standard varies depending on programs and ad types.
Recently, interactive rich media ads with sounds and movies using Flash and JavaScript have become popular, but it is still essential to have sophisticated designs and copies of ads as they will attract more users. Online marketing is just as important as TV commercials.
Also, the location where the ad is displayed is important. When an ad is published on the top page of a medium website, it will be clicked more if it is located at a more noticeable location. In general, an ad with a larger area, higher up on a web page is considered better. Of course, such a position sells for a high price. So, you need to consider cost-efficiency.
In online ad effect measurement, measure the click rate per website as well as per creative and figure out which media (websites) and creatives are the most effective.
When an ad is charged per publication or distribution, as with display ads (banner ads) or e-mail ads, CPC is calculated as follows:
CPC = Ad posting (distribution) fee ÷ Clicks
There are also ads sold on a CPC basis such as listing ads (search linked ads) and some display ads (banner ads). These are called PPC (Pay per Click) ads.
CPC ranges from a few cents, to a couple of dollars, depending on bidding prices between competitors, the product or service type as well as the ad position and the quality of the ad creatives. Recently, advertisers for listing ads (search linked ads) have drastically increased in certain industries. Now CPC can be a couple of dollars to tens of dollars.
As with the conventional mass advertisements in newspapers, on TV, as well as the impression effect from the display ad (banner ad), an ad charged onan ad that uses an impression basis is more efficient if your goal is to become a household name. On the other hand, if your goal is to gain visitors to the company’s website or EC website, a PPC ad charged on a CPC basis is better.
CPC is an important index in ad effect measurement to gain visitors efficiently.
A high CTC means that the effect of your marketing strategy is high. CTC can be considered to be the conversion rate of an ad.
The formula to calculate CTC is as follows:
CTC(%) = Conversions/Clicks x 100
CTC(%) = 1,000/100,000 Clicks x 100
If a banner ad is published on website B for a month and it is clicked 25,000 times, resulting in 500 conversions, the CTC is 2%.
Since the CTC for website B is higher, the ad effect on website B is higher.
For example, when a banner ad is published at $5,000 per month and 100 purchases are acquired via the ad, the CPA is $50.
CPA = Total cost/ conversions
For example, assume search linked ads with two types of keywords were published and their results were as shown in the figure to the right. While CPC is ¢5 for both keywords, CPA is $5 for keyword A and $10 for keyword B. That is, keyword A could acquire clicks leading to conversions with the same CPC as keyword B.
Checking the CPA clarifies the cost-efficiency of each ad campaign.
The ROI can be obtained using the following formula:
Ad ROI (%) = Profit/Cost x 100
The following formula may be used to simplify the calculation for web marketing:
Ad ROI = (Sales - Ad cost)/Ad cost
Assume that an advertiser wants to lead users to the advertiser’s website to sell a product with a profit of $10 for each.
This advertiser invested $1,000 for the ad campaign over the course of a week and 130 products were sold. The total profit for that week is $1,300 ($10 x 130). By subtracting the ad cost of $1,000 you get a profit of $300.
This means that as a result of the initial investment of $1,000, a profit of $300 was returned. Then the ROI is 30% (30,000/100,000×100).
ROAS (%) = Total Sales/ Ad cost x 100
This index indicates “how much sales grew due to the ad.” If the ROAS is lower than 100%, it means that the money spent on the ad campaign is larger than the profit. If a single product or service is handled, ROAS can be calculated by dividing the unit price of the product or service by Cost per Acquisition (CPA).
Even when the ROAS is over 100%, the ad campaign cannot bring in a profit if the ROI is negative.
When publishing a display ad (banner ad), if the ad fee is $1,000 and the sales amount gained from the ad is 200,000, the ROAS is 200%. However, if the profit is $500, the ROI is in the red and the amount invested to publish the ad was not recovered.
You will need to clarify the goal of the ad, understand its target users and projected effect, design a media plan leading to a success and choose an ad menu by verifying its effect in advance.
Verify the following effects:
Note that frequency is not important for response-type ads, like ads linked with a search engine (i.e., listing ads). Frequency is important when you are advertising with banners, re-targeting ads and behavior targeting ads.
The cross-media effect, seen between ads released to the mass-media and online, can be measured with frequency and reach indices. Cross-medial marketing involves the use of different media, based on their specific qualities. The main purpose of this combination is to increase the reach of a marketing campaign.
The cross-medial distribution of content is an efficient way to increase brand-awareness. Brand awareness is used to intensify the user-experience, for instance, if you are selling or offering an expensive item, like a car or a house, you need to remember that users are going to evaluate all of their options before making the decision to buy. It might take them a long time to finally take that last step and decide to buy your product. It is very important to stay fresh in the user’s minds during this period of indecision as this will contribute to your results. You can do this by having ads on the TV promoting your car, sending informational newsletters to their email, sending out coupons in newsletters with links back to the dealership’s website, etc.
The main features of online media are:
Internet media players include (1) portal and special websites, (2) movies and rich media sites, (3) e-mail ads (newsletters), (4) affiliate websites, (5) search engines, (6) DSP, SSP, third-party distributions and ad networks, (7) recommended ads and (8) social media data collection .
Banner ads can be displayed in two ways: horizontally or vertically. The rectangle ad displays in sizes of 468 (horizontal) × 60 (vertical) pixels and the skyscraper ad in 728 (horizontal) × 90 (vertical) pixels are the two most oft-used sizes.
As users can be categorized based on their interests, newsletters are one of the most effective ad types since subscribers tend to be predictable.
Circulations also varies greatly. In order to measure the ｓeffect of the ad, parameters are generally added to the URL within the link in the ad.
Raising the bid price on a keyword allows your ad to be displayed at a higher rank on the search results page. It is important, however, to find the best keyword for your product and spend the appropriate amount relative to your budget, rather than spending money on every keyword. No matter how many inflows a keyword induces to the website, the amount spent on it will be wasted if the visits do not lead to conversions. In contrast, finding a promising keyword and bidding aggressively for it will increase overall conversions even if this keyword does not generate much inflow.
Conversions will further increase if you focus the landing page on the user’s choice of keyword. For example, for a pet shop’s web page, displaying a cat food page for users who searched for “cat food” and a dog food page for users who searched for “dog food” as their landing pages can increase purchases.
Access analysis tools can examine from which affiliate website each user came by checking the referrer (link source page).Results per affiliate website can be measured using an affiliate program, however, access analysis can find referrers and lead to success.
Using an affiliate ad gives an advertiser two big advantages. Firstly, the ad can reach users who are likely to be interested in the product or service since it is published in an area the users frequent (e.g., a website specializing in a particular topic). Secondly, the cost-efficiency is higher than other types of ads, for example, a banner ad that is charged a fixed fee regardless ofthe results.
When an ad is distributed over an ad network, the charging method differs from operator to operator.
Quantifying post-click activities as post-click data when evaluating the ad’s effect is called post-click analysis. In ad effect measurement, it is used as one of indices to measure the “indirect effect of an ad.”
The indirect effect of an ad, clarified via post-click analysis, is the effect seen from a user who converted on their second, third, etc. visit instead of their first visit.
Assume that a user clicked a banner ad or a listing ad and visited the advertiser’s website but exited without converting. In normal access analysis data, since the session was disconnected once, the conversion for this click is counted as 0. However, if this user converts when they revisit the same website at a later date, it can be recorded that the conversion is the result of the ad that caused their first visit. This is called the “indirect effect of an ad” and is measured by analyzing the post-click data.
Along with the evolution of access analysis software and expertise, it has become clear how users act within a website causing an increase in demand for more in-depth evaluations.
It is not easy to analyze the indirect effect of an ad. The post-click analysis is one of the methods to measure the indirect effect of an ad.
When performing an ad effect evaluation, you must investigate user activities over the course of a particular period of time and what they do after they leave the website.
This data will allow you to create the best and most cost efficient ad campaign possible.
Attribution analysis has been becoming more popular as new software is developed that allows analysts to evaluate the effect of an ad by associating it, not only with the session where a conversion occurred, but also with user activities before that session.
Note that diversified ideas of attribution evaluation and analysis as well as specific methods and indices still exist and are not yet clearly defined.
Note that future impressions are merely an expected value. An ad frame with ten million impressions this month will not necessarily produce ten million impressions next month. Therefore, when selling an ad frame for “pure ads,” sales activities are conducted with impressions fewer than the expected value as the ad stock.
*Representative services include “Micro Ad Network” from MicroAd and “Advertising.com Network” from Advertising.com Japan.
The needs of the publisher are that they want to centrally manage multiple ad frame stocks (ad networks) and sell them at will. Then a new mechanism called an ad exchange emerged and ad frames are now sold and purchased at auctions.
*Representative services include “Right Media Exchange” from Right Media, “OpenX” from Cyber Communications Inc. (CCI) and “Facebook Ad Exchange” from Facebook.
Ads are distributed via the DSP and the SSP in the following way:
1) Advertisers register ad creatives and bid prices onto the DSP.
2) Publishers register their ad frames and lowest bid prices onto the SSP.
3) When a user accesses a website managed by a publisher and an ad frame is displayed, the information related to the ad frame is sent to the ad exchange.
4) The SSP and the ad exchange choose the ad with the highest bid price and displays it in the ad frame.
*Representative DSP services include “MicroAd BLADE” from MicroAd, “MarketOne RTB” from Platform One, “FreakOut DSP” from FreakOut, and “deqwas.DSP” from Scigineer and Kyocera Communications System (KCCS). The representative SSP services include “MicroAd AdFannel” from MicroAd and “YIELD ONE” from Platform One.
The combination of DSP, SSP and RTB generates advantages for the user, advertiser and publisher. When the ads displayed are optimized for each user, the cost-efficiency is optimized for the advertiser and the prices and stocks are optimized for the publisher.
The 3PAS method can manage ads on multiple types of media including display ads, DSP and rich-media ad distribution using a third-party ad server in an integrated way. Data from multiple ad distribution channels is gathered on the third-party ad server allowing ad publishers to tailor ad displays to a single user.
Different creatives can be presented to a user depending on whether they visited the website for the first time or the fiftieth. Normally, ad effect measurement tools evaluate ads on a click basis (direct effect). However, using the third-party ad server, it is also possible to evaluate the indirect effect on an impression basis.
*Representative 3PAS services include “DoubleClick for Advertisers(DFA)” from Google, “dg Media Mind” from Sizmek, “Digitalice” from Fringe81, and “i-Effect” from Digital Advertising Consortium (DAC) and ALBERT.
Tips for using re-targeting include looking at how recently a user viewed the product in addition to frequency and user attributes. Since this approach starts with looking at visit history, as with e-mail policies such as CRM, it is important to create your strategy with a few questions in mind. Asking yourself “Will the user still want to purchase more items?” “How many days will pass before the user will want to buy more?” or “If they purchased something today, how can I tempt them to buy more in the near future?” etc. will help you mold your strategy.
Note that since the user is going to continuously see the ad you are publish after exiting the company’s website, they may feel as if the ad is chasing them. You need to be able to find a good balance so that the ads catch the user’s attention but don’t make them feel like you are pushing them too hard. Displaying the ad too often can spoil the advertiser’s image in the eye of the customer.
* Google re-marketing ads are examples of re-targeting ads.
To use recommended ads, the optimization of product data and the creation of a dedicated data feed are indispensable. It is also necessary to organize product data according to a precise format that is easily understood by companies that provide these types of ads including an inventory status. Care must be taken when choosing to use this method.
* Representative services include “CRITEO Performance Display Ads” from Criteo and “deqwas.AD” from Scigineer, and “Omotenashi Banner” from TAGGY.
In addition, DFO (Data Feed Optimization) is available to optimize said product data. By centralizing distribution management of product data and mitigating efforts to update the data, DFO maximizes contact opportunities between ads and users (i.e., minimizes opportunity losses) and measures the performance of the distribution target in order to manage optimal ad distribution factors.
* The major DFO service providers include Commerce Link and feedforce.
The purpose of an ad varies from “improving recognition” or branding (the company or product name) to “enhancing sales promotions” (by inducing customers to the website for using a service or buying a product), however, the final purpose should be “increasing the sales and profits.”
As a web analytics consultant, you have to know how to measure the effect of online advertising. Online ad effect measurement requires not only analysis of the access log data of the website but also analysis of various data types such as the access log on the ad server. You also need to understand the characteristics of each type of data.
The following explains how to understand the flow of ad effect measurement and how to use major indices. While there are some exceptions for newsletter ads and affiliate ads, the basic user flow and indices are the same.
Terms Used in Ad Effects Measurement
Impressions
Impressions i.e. the display count indicate how many times an Internet ad was displayed on a website. Note that the number of impressions is different that the number of PVs. While PVs indicate just how many pages were displayed, impressions indicate how many times the ad was displayed. [o1] Assume ads A and B are published in the ad frames of a web page at equal rates. If the PVs for the ad page is 5,000, impressions for ads A and B are 2,500 each.Impressions for a listing ad can be a hint as to how often the target keyword is searched for.
What You Can See from Impressions
An increase in your impression rate means that more people are viewing the ad. By dividing the number of clicks by the number of impressions, the click-through rate (CTR) is obtained and the effect of the ad can be calculated more precisely.Click rate (%) = (Clicks on ad / Impressions on ad) x 100
There are different reasons why the number of impressions might be smaller than you expected them to be. The problem might be the medium chosen to publish the ad or even the wrong keyword. Think about changing these factors if your website is not as popular as you were expecting it to be.
How to Measure Impressions
Impressions are measured using log data from the ad server distributing the ad. The method used to calculate the number of impressions includes the OTS (Opportunity to See)-based method and the conventional request-based method.The request-based method
This method counts requests as impressions and is used by many ad servers.
The OTS-based method
This method counts impressions “closer to users” and its implementation includes the beacon count method.*[TP1]The beacon count method embeds a beacon or tag (e.g., 1- x 1-pixel transparent GIF request) in the ad and the ad server counts the requests made by the beacon as an impression.
While TVs and radios have audience and program ratings and newspapers and magazines have circulation and reading rates as their indices, there is no index to measure the ad display itself. For an Internet ad, the ad exposure rate can be understood more accurately by measuring how many times the ad (e.g., banner image or text) was displayed.
Cost per Mille
CPM (cost per mille) is one type of advertising charge unit and is the fee per 1,000 impressions. It is also called CPT (cost per thousand). For an ad with the intention of exposure (e.g., branding), an ad frame charging on CPM basis is often used.The word mille is a Latin word that means “1,000.”
Conventionally, CPM was mainly used by banner ads on leading portal websites, however, it has been used increasingly more often by ad networks. Since ad networks occasionally use CPM to calculate how much they charge, cases where CPM is used as the index even for a small-scale ad are increasing.
CPM = ad cost/impressions÷1000
Clicks
Clicks, or taps on a smartphone, are used to measure the number of times users transfer from the ad on the page they are viewing to the advertiser’s webpage. Using this data, you can determine the best place to display your advertisements and ways that you can improve them to gain even more clicks.As an advertiser, you will not only need to develop relationships with potential customers, but also with referrer sites. If your ad is not shown on a referrer site, your inflow will noticeably decrease.
CTR (Click Through Rate)
The CTR (Click Through Rate) is the rate of “how many times an ad was clicked” versus “how many times the ad was displayed.”Basically, multiple clicks during the same visit are regarded as one click and, in many cases, CTR has the same meaning as sessions. It can be counted as visits to a website from an ad.
CTR(%) = (Clicks on Ad/ Display of Ad) x 100 = (Clicks / Impressions) x100
For example, assume that a banner ad was published on website and then displayed 10,000 times. If this ad was clicked 100 times, the CTR is 1%. You can consider CTR as website visits.
One of the important purposes of Internet ads is to acquire visitors to your website and this is called the traffic effect. CTR is the index used to measure the traffic effect.
The higher the CTR, the higher the traffic effect, meaning that many visitors are coming to the website. Therefore, improving the CTR is necessary in an ad campaign.
A higher CTR means that the displayed ad is more likely to be clicked.
When measuring CTR, an ad server (a server dedicated to distributing ads) and an ad effect measurement program will not count duplicated clicks. For example, multiple clicks during a single session or within a particular period of time are counted as 1.
For some listing ads, unjust clicks are not counted. This standard varies depending on programs and ad types.
The Ad Creative
Ad creative is the expression used to describe an ad after it has been distributed (i.e., text, graphics, and images).Recently, interactive rich media ads with sounds and movies using Flash and JavaScript have become popular, but it is still essential to have sophisticated designs and copies of ads as they will attract more users. Online marketing is just as important as TV commercials.
Ad media and location
You must publish ads in the proper places. If an ad for a dog food is published on a “cat lover’s site,” no one will click it.Also, the location where the ad is displayed is important. When an ad is published on the top page of a medium website, it will be clicked more if it is located at a more noticeable location. In general, an ad with a larger area, higher up on a web page is considered better. Of course, such a position sells for a high price. So, you need to consider cost-efficiency.
Incentive for clicking (e.g., point or right to participate in a prize competition)
Your client’s business goal or result can be achieved by improving CTR.In online ad effect measurement, measure the click rate per website as well as per creative and figure out which media (websites) and creatives are the most effective.
CPC (Cost per Click)
CPC (Cost per Click) is an index that indicates the cost required for one click of an ad.When an ad is charged per publication or distribution, as with display ads (banner ads) or e-mail ads, CPC is calculated as follows:
CPC = Ad posting (distribution) fee ÷ Clicks
There are also ads sold on a CPC basis such as listing ads (search linked ads) and some display ads (banner ads). These are called PPC (Pay per Click) ads.
CPC ranges from a few cents, to a couple of dollars, depending on bidding prices between competitors, the product or service type as well as the ad position and the quality of the ad creatives. Recently, advertisers for listing ads (search linked ads) have drastically increased in certain industries. Now CPC can be a couple of dollars to tens of dollars.
As with the conventional mass advertisements in newspapers, on TV, as well as the impression effect from the display ad (banner ad), an ad charged onan ad that uses an impression basis is more efficient if your goal is to become a household name. On the other hand, if your goal is to gain visitors to the company’s website or EC website, a PPC ad charged on a CPC basis is better.
CPC is an important index in ad effect measurement to gain visitors efficiently.
CTC (Click to Conversion/Click through Conversion)
CTC is an index used to measure the effects of Internet ads and indicates the rate of conversions in relation to total clicks. CTC is calculated by dividing the number of conversions by the visits made by clicking a text ad or listing ad on a website or in a newsletter.A high CTC means that the effect of your marketing strategy is high. CTC can be considered to be the conversion rate of an ad.
The formula to calculate CTC is as follows:
CTC(%) = Conversions/Clicks x 100
How to Utilize CTC
If a banner ad, published on website A for a month, gains 100,000 clicks and 1,000 conversions, the CTC is 1% as shown below.CTC(%) = 1,000/100,000 Clicks x 100
If a banner ad is published on website B for a month and it is clicked 25,000 times, resulting in 500 conversions, the CTC is 2%.
Since the CTC for website B is higher, the ad effect on website B is higher.
The Cost Per Acquisition (CPA)
The CPA is the cost of acquiring a single result that leads to a conversion, whether it be a purchase or a member registration. It can be calculated by dividing the cost for your marketing strategy for by the number of results.For example, when a banner ad is published at $5,000 per month and 100 purchases are acquired via the ad, the CPA is $50.
CPA = Total cost/ conversions
How to Utilize CPA
To see how efficientlyclicks are acquired, compare the CPC results. Note that in many online businesses, click do not necessarily mean “profits.”
For example, assume search linked ads with two types of keywords were published and their results were as shown in the figure to the right. While CPC is ¢5 for both keywords, CPA is $5 for keyword A and $10 for keyword B. That is, keyword A could acquire clicks leading to conversions with the same CPC as keyword B.
Checking the CPA clarifies the cost-efficiency of each ad campaign.
The Return on Investment (ROI)
The ROI is the ratio of the effect (profit) gained against the cost invested in an advertising strategy. With the ad effect measurement, ROI is used primarily as an effect index to measure how much effect (profit) was gained compared to the amount spent on the ad.The ROI can be obtained using the following formula:
Ad ROI (%) = Profit/Cost x 100
The following formula may be used to simplify the calculation for web marketing:
Ad ROI = (Sales - Ad cost)/Ad cost
Assume that an advertiser wants to lead users to the advertiser’s website to sell a product with a profit of $10 for each.
This advertiser invested $1,000 for the ad campaign over the course of a week and 130 products were sold. The total profit for that week is $1,300 ($10 x 130). By subtracting the ad cost of $1,000 you get a profit of $300.
This means that as a result of the initial investment of $1,000, a profit of $300 was returned. Then the ROI is 30% (30,000/100,000×100).
The Return on Ad Spending (ROAS)
The ROAS is an index used to indicate the cost-efficiency of an ad and refers to the sales amount gained from the ad. It can be obtained by dividing the sales amount by the ad cost.ROAS (%) = Total Sales/ Ad cost x 100
This index indicates “how much sales grew due to the ad.” If the ROAS is lower than 100%, it means that the money spent on the ad campaign is larger than the profit. If a single product or service is handled, ROAS can be calculated by dividing the unit price of the product or service by Cost per Acquisition (CPA).
How to Utilize ROAS
Indices for the cost-efficiency of ads includes the Return on Investment (ROI) in addition to ROAS. The difference between the two is that ROAS compares the “sales amount” with the ad cost and the ROI compares the “profit” with the cost of the ad.Even when the ROAS is over 100%, the ad campaign cannot bring in a profit if the ROI is negative.
When publishing a display ad (banner ad), if the ad fee is $1,000 and the sales amount gained from the ad is 200,000, the ROAS is 200%. However, if the profit is $500, the ROI is in the red and the amount invested to publish the ad was not recovered.
Designing Internet Ads
There are various types of Internet ads, display methods, billing forms and methods of distribution. You need to recognize the effect and relationship between the various kinds of indices before publishing an Internet ad.You will need to clarify the goal of the ad, understand its target users and projected effect, design a media plan leading to a success and choose an ad menu by verifying its effect in advance.
Verify the following effects:
Note that frequency is not important for response-type ads, like ads linked with a search engine (i.e., listing ads). Frequency is important when you are advertising with banners, re-targeting ads and behavior targeting ads.
- Frequency: How many times a person viewed an ad (count)
- Reach: How many people viewed an ad (ratio)
The cross-media effect, seen between ads released to the mass-media and online, can be measured with frequency and reach indices. Cross-medial marketing involves the use of different media, based on their specific qualities. The main purpose of this combination is to increase the reach of a marketing campaign.
The cross-medial distribution of content is an efficient way to increase brand-awareness. Brand awareness is used to intensify the user-experience, for instance, if you are selling or offering an expensive item, like a car or a house, you need to remember that users are going to evaluate all of their options before making the decision to buy. It might take them a long time to finally take that last step and decide to buy your product. It is very important to stay fresh in the user’s minds during this period of indecision as this will contribute to your results. You can do this by having ads on the TV promoting your car, sending informational newsletters to their email, sending out coupons in newsletters with links back to the dealership’s website, etc.
Features of Online Media
Online media allows for companies to increase the number of products and services they offer and make them available to the global community rather than just their local community.The main features of online media are:
Responsiveness
Users that have access to the internet can click on an advertisement from anywhere in the world and buy a product. This response-type ad is one where companies are looking for a strong response from their customers.Bi-directionality
Bi-directional ads are ads published on social media sites through social media data mining tools. They allow the seller and the buyer to interact directly with one another.Vast availability of information and the ability to visualize effects
As this type of media is published online, analysts and businesses can gather data from their advertisements. Collectable user consumption data includes user location, which was difficult to gather from analog marketing. The ready availability of various types of data significantly changed the concept of marketing.Internet media players include (1) portal and special websites, (2) movies and rich media sites, (3) e-mail ads (newsletters), (4) affiliate websites, (5) search engines, (6) DSP, SSP, third-party distributions and ad networks, (7) recommended ads and (8) social media data collection .
Ad Distribution Methods and the Marketing Funnel
You will need to use different distribution methods depending on the purpose of your ad campaign. The following illustrates various ad distribution methods and the Internet marketing funnel.The cognitive layer
This layer targets a very wide range of users through a distribution method is referred to as the broad reach method i.e. the non-targeting method.The potential layer
This layer is represented by the demographic distribution that targets users by gender or age, area distribution that targets users by region and audience expansion (expanded distribution) distribution ads targeting users that act similarly to those already visiting the company’s website.The targeting layer
The surface layer is a layer in which users are re-targeted. Ads are distributed according to the browsing history of users who visit the company’s website.Types of Ads
Terms Related to Online AdvertisementsDisplay ad (Banner ad)
This is the most widely used type of ad on the Internet. It displays an image of a predefined size along with a link to a website. When clicked, it takes users to the advertiser’s website. In general, banners are the preferred type of ad because they are visually attractive and easy to use.Banner ads can be displayed in two ways: horizontally or vertically. The rectangle ad displays in sizes of 468 (horizontal) × 60 (vertical) pixels and the skyscraper ad in 728 (horizontal) × 90 (vertical) pixels are the two most oft-used sizes.
Newsletter ads
This type of ad is published in newsletters issued by publishers or other organizations. The issuers vary from corporations to individuals and the contents are intended to appeal to a specific user with product information, news articles or academic matters concerning a particular arena of interest.As users can be categorized based on their interests, newsletters are one of the most effective ad types since subscribers tend to be predictable.
Circulations also varies greatly. In order to measure the ｓeffect of the ad, parameters are generally added to the URL within the link in the ad.
Listing ads
Listing ad is also called PPC (Pay-per-click) ads and search linked ads. For typical listing ads, the display ranking is determined by the amount of money (the bid price) you are willing to spend on a keyword and the quality of said keyword. By utilizing access analysis programs, you can find the keyword with the highest effect and create an efficient listing ad. These programs can tell you the different keywords visitors used to find your website, which of these keywords led to the most conversions and which of them resulted in a high bounce rate.Raising the bid price on a keyword allows your ad to be displayed at a higher rank on the search results page. It is important, however, to find the best keyword for your product and spend the appropriate amount relative to your budget, rather than spending money on every keyword. No matter how many inflows a keyword induces to the website, the amount spent on it will be wasted if the visits do not lead to conversions. In contrast, finding a promising keyword and bidding aggressively for it will increase overall conversions even if this keyword does not generate much inflow.
Conversions will further increase if you focus the landing page on the user’s choice of keyword. For example, for a pet shop’s web page, displaying a cat food page for users who searched for “cat food” and a dog food page for users who searched for “dog food” as their landing pages can increase purchases.
Affiliate ads
This type of ad is also called a pay per action ad. Affiliates place links on websites, blogs and in newsletters, and then pay the fees to the owner of the website or issuer of the newsletter from which a conversion occurred.
Access analysis tools can examine from which affiliate website each user came by checking the referrer (link source page).Results per affiliate website can be measured using an affiliate program, however, access analysis can find referrers and lead to success.
Using an affiliate ad gives an advertiser two big advantages. Firstly, the ad can reach users who are likely to be interested in the product or service since it is published in an area the users frequent (e.g., a website specializing in a particular topic). Secondly, the cost-efficiency is higher than other types of ads, for example, a banner ad that is charged a fixed fee regardless ofthe results.
Ad Cost
The ad cost is the expense required to publish an online ad. The method that companies use to calculate their prices differs depending on the ad type and publishing style. Impressions guaranteed ads are charged based on the exposure count, click guaranteed ads (PPC ads) are charged based on clicks and customer action ads (affiliate ads) are charged based on their final results.When an ad is distributed over an ad network, the charging method differs from operator to operator.
Impression guaranteed ads
Impression guaranteed ads are continuously published until they achieve a set number of impressions. You should use this type of ad if you are aiming to have more views than clicks.Click guaranteed ads
Click guaranteed ads and PPC ads are continuously published until they achieve a set number of clicks. For example, if 10,000 clicks are guaranteed with the cost per click being ¢20, the ad cost is $2,000. Since the cost per click and clicks are guaranteed, the traffic effect is clear before publishing the ad.Affiliate ads i.e. customer action ads
This type of ad charges based on results such as orders and information requests. Publishing the ad itself is basically free. Since the cost occurs in accordance with results, you can increase your ad’s effectiveness.Post Click Attribution
Post-Click Engagement
The term post-click engagement refers to a user’s activities after they clicked an ad displayed on a webpage.Quantifying post-click activities as post-click data when evaluating the ad’s effect is called post-click analysis. In ad effect measurement, it is used as one of indices to measure the “indirect effect of an ad.”
The indirect effect of an ad, clarified via post-click analysis, is the effect seen from a user who converted on their second, third, etc. visit instead of their first visit.
Assume that a user clicked a banner ad or a listing ad and visited the advertiser’s website but exited without converting. In normal access analysis data, since the session was disconnected once, the conversion for this click is counted as 0. However, if this user converts when they revisit the same website at a later date, it can be recorded that the conversion is the result of the ad that caused their first visit. This is called the “indirect effect of an ad” and is measured by analyzing the post-click data.
Along with the evolution of access analysis software and expertise, it has become clear how users act within a website causing an increase in demand for more in-depth evaluations.
It is not easy to analyze the indirect effect of an ad. The post-click analysis is one of the methods to measure the indirect effect of an ad.
When performing an ad effect evaluation, you must investigate user activities over the course of a particular period of time and what they do after they leave the website.
This data will allow you to create the best and most cost efficient ad campaign possible.
Attribution
Analyzing which ad or medium contributed a conversion is called attribution analysis.Attribution analysis has been becoming more popular as new software is developed that allows analysts to evaluate the effect of an ad by associating it, not only with the session where a conversion occurred, but also with user activities before that session.
Let’s look at an example of indirect effect measurement by attribution:
Attributions for direct effects and indirect effects:
Example) A user was led to a conversion through a banner ad, newsletter and listing ad.1) Conventional evaluation (direct effect)
Evaluates the ad clicked just before the user visited the website for conversion.
2) Evaluation by attribution (indirect effect)
Evaluates not only the ad clicked just before the user visited the website for conversion, but also other ads clicked before that ad.
Note that diversified ideas of attribution evaluation and analysis as well as specific methods and indices still exist and are not yet clearly defined.
Ad Technology
Ad technology is a general term for technology that provides various services related to advertisers, media companies and ad distribution between them.Advertisers
Advertisers publish ads. From the viewpoint of the advertiser, ad technology is required to enable publishing Internet ads as efficiently and effectively as possible.Publishers
Publishers have a medium in which they publish ads. They might own a magazine, run a newspaper or even be the owner of a website which has ad frames available. Publishers require ad technology to enable the enhancement of the value of their ad frames.Stocks
Stocks refer to the expected impressions for an ad during a particular period of time in the future. For example, “the ad stock of a website for the next month is ten million” means that the ad frame on that website is expected to be displayed ten million times next month.Note that future impressions are merely an expected value. An ad frame with ten million impressions this month will not necessarily produce ten million impressions next month. Therefore, when selling an ad frame for “pure ads,” sales activities are conducted with impressions fewer than the expected value as the ad stock.
Pure Ads
Pure ads are display ads published by specifying the position on the medium and the period of time for publication. They are also called “frame-type ads” because the ad frame is fixed.Operation Type Ads
This type of ad allows software to capture and improve an ad’s effect in real time. The representative operation type ads include the listing ad and DSP.Ad Networks
An ad network is a method in which a publisher packages ad frames (ad stocks) and sells them to advertisers. Ad networking is growing in popularity as publishers can network (package) ad stocks to reduce their sales costs and gain profits. The advantage for advertisers is that they can distribute ads on multiple types of media without making contracts with multiple companies.
*Representative services include “Micro Ad Network” from MicroAd and “Advertising.com Network” from Advertising.com Japan.
Ad Exchanges
As the ad network penetrates, new needs arise both for the advertisers and publishers. The needs of the advertisers are that they want to publish ads only to ad frames with higher effects to improve the customer acquisition efficiency of the ads.The needs of the publisher are that they want to centrally manage multiple ad frame stocks (ad networks) and sell them at will. Then a new mechanism called an ad exchange emerged and ad frames are now sold and purchased at auctions.
*Representative services include “Right Media Exchange” from Right Media, “OpenX” from Cyber Communications Inc. (CCI) and “Facebook Ad Exchange” from Facebook.
DSP, SSP and RTB
As the ad network and the ad exchange spread, deployment and management of ads became difficult for both advertisers and publishers. A mechanism to manage multiple ad networks and ad exchanges in an integrated manner was required. In response to the new requirements, the Demand Side Platform (DSP) and the Supply Side Platform (SSP) emerged for advertisers and publishers respectively.Ads are distributed via the DSP and the SSP in the following way:
1) Advertisers register ad creatives and bid prices onto the DSP.
2) Publishers register their ad frames and lowest bid prices onto the SSP.
3) When a user accesses a website managed by a publisher and an ad frame is displayed, the information related to the ad frame is sent to the ad exchange.
4) The SSP and the ad exchange choose the ad with the highest bid price and displays it in the ad frame.
*Representative DSP services include “MicroAd BLADE” from MicroAd, “MarketOne RTB” from Platform One, “FreakOut DSP” from FreakOut, and “deqwas.DSP” from Scigineer and Kyocera Communications System (KCCS). The representative SSP services include “MicroAd AdFannel” from MicroAd and “YIELD ONE” from Platform One.
Ways to Purchase RTB and Ad Stocks
Over the past few years, the way in which you can purchase ads has changed. With the RTB (Real Time Bidding) method, advertisers targeting a user bid for the ad frame on the site they are visiting the moment the user clicks the link that will take them to a landing page. The ad displayed in the ad frame when the page loads is determined at that moment, hence being called “real time bidding.” The advantage for the advertisers is that they can expose ads by targeting not an “ad frame” but a “user.” The advantage for publishers is that they can raise the value of an ad frame.The combination of DSP, SSP and RTB generates advantages for the user, advertiser and publisher. When the ads displayed are optimized for each user, the cost-efficiency is optimized for the advertiser and the prices and stocks are optimized for the publisher.
Third-Party Ad Serving (3PAS)
As we have previously discussed, advertisers or ad agencies publish ads via an individual publisher’s ad server. They then evaluate the effect of the ad on a click basis by analyzing data measured with access analysis and ad effect measurement programs. In contrast, 3PAS uses a third-party ad server instead of an individual publishers’ ad server to centrally manage and distribute ads as well as measure their effects.The 3PAS method can manage ads on multiple types of media including display ads, DSP and rich-media ad distribution using a third-party ad server in an integrated way. Data from multiple ad distribution channels is gathered on the third-party ad server allowing ad publishers to tailor ad displays to a single user.
Different creatives can be presented to a user depending on whether they visited the website for the first time or the fiftieth. Normally, ad effect measurement tools evaluate ads on a click basis (direct effect). However, using the third-party ad server, it is also possible to evaluate the indirect effect on an impression basis.
*Representative 3PAS services include “DoubleClick for Advertisers(DFA)” from Google, “dg Media Mind” from Sizmek, “Digitalice” from Fringe81, and “i-Effect” from Digital Advertising Consortium (DAC) and ALBERT.
Re-targeting
Re-targeting is a method used by ad publishers to encourage repeat visits to websites. Since users who have visited a website are considered as good prospects for conversion, re-targeting can achieve good results when applied appropriately.Tips for using re-targeting include looking at how recently a user viewed the product in addition to frequency and user attributes. Since this approach starts with looking at visit history, as with e-mail policies such as CRM, it is important to create your strategy with a few questions in mind. Asking yourself “Will the user still want to purchase more items?” “How many days will pass before the user will want to buy more?” or “If they purchased something today, how can I tempt them to buy more in the near future?” etc. will help you mold your strategy.
Note that since the user is going to continuously see the ad you are publish after exiting the company’s website, they may feel as if the ad is chasing them. You need to be able to find a good balance so that the ads catch the user’s attention but don’t make them feel like you are pushing them too hard. Displaying the ad too often can spoil the advertiser’s image in the eye of the customer.
* Google re-marketing ads are examples of re-targeting ads.
Recommended Ad and Data Feed Optimization
Recommended ads are placed in such a way that they attract a user’s attention. This ad distribution method is based on re-targeting ad technology by analyzing the browsing history and the interests of the user in addition to their audience data.To use recommended ads, the optimization of product data and the creation of a dedicated data feed are indispensable. It is also necessary to organize product data according to a precise format that is easily understood by companies that provide these types of ads including an inventory status. Care must be taken when choosing to use this method.
* Representative services include “CRITEO Performance Display Ads” from Criteo and “deqwas.AD” from Scigineer, and “Omotenashi Banner” from TAGGY.
In addition, DFO (Data Feed Optimization) is available to optimize said product data. By centralizing distribution management of product data and mitigating efforts to update the data, DFO maximizes contact opportunities between ads and users (i.e., minimizes opportunity losses) and measures the performance of the distribution target in order to manage optimal ad distribution factors.
* The major DFO service providers include Commerce Link and feedforce.
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