Unit 2

11-09-2019
Unit - 2
Prepared By:
Dr. Milan Vachhani
Associate Professor, M – 9898626213, E – milan.vachhani@gmail.com
Sunshine Group of Institutions, Rajkot
Blog – milanvachhani.blogspot.com
TYPES OF DISPLAY ADS
▰ Display ads can be classified into different types based on two

factors: size and format.
1. Format
▰ Based on format, display ads can be grouped into three categories as
follows:
Image Ads
▰ Image ads contain static images related to your product or service.
They have no effects and are the most standard format of
advertising.
milanvachhani.blogspot.com
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Rich Media Ads

▰ Rich media ads include other interactive media elements such as
animations, GIFs or other dynamic aspects which change upon user
interaction. For example, ads which you can interact with as you hover on
them or scroll down.
▰ A classic example of a rich media ad is a page peel ad, where in, when you
click on the slightly peeled off part on the top right, the ad appears as the
page peels off completely.
Video Ads
▰ Video ads are those in which a video is embedded in the ad. This format
of advertising is extensively used in YouTube. It is highly effective and is
gaining immense popularity in the advertising world. milanvachhani.blogspot.com
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2. Display Ad Size
▰ Display ads are put up in various sizes based on the availability of
space on the website. The most popular, top performing and
standardised ad sizes are described following.
Medium Rectangle
▰ Available both in the desktop and mobile platform.
▰ Medium rectangle ad is the most popular display ad.
▰ The content could include text, images or other animations.
▰ The ad size is 300 (width) x 250 (height) pixels.
▰ Figure shows the position of the ad. milanvachhani.blogspot.com
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Medium rectangle ad Large rectangle
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Leaderboard Half page
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Large mobile
Large format ads Skinning/takeover ad
banner
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Large Rectangle
▰ Large rectangle has more ad space when compared to the medium
rectangle and thus can be used to communicate better.
▰ This ad is only available in the desktop mode. The standard size of
large rectangle is 336 x 280 pixels (See Figure).
Leaderboard
▰ This ad is generally placed above the main content at the top of the
page.
▰ It is available only on the desktop mode and is generally found in
portals, news sites, forums.
▰ The standard size for this ad is 728 x 90 pixels (Figure).milanvachhani.blogspot.com
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Half Page
▰ This is the biggest of all and covers most part of the webpage. It
provides ample space to the advertisers to communicate their
message and provide rich engagement.
▰ Available only in the desktop mode, the half-page ad is increasingly
gaining traction and has a size of 300 x 600 pixel (Figure).
Large Mobile Banner
▰ As the name suggests, this ad is only available on mobile, and is
larger than the standard mobile ad which is 320 x 50 pixels.
▰ The standard size for this ad is 320 x 100 pixels (Figure).
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Large Format Ads

▰ These ads cover a large part of the screen.
▰ They may expand on hovering. They are also called 'expandables'
(Figure)
Skinning/Takeover
▰ In these ads, one advertiser takes all the ad spaces on a page.
▰ Figure shows four ads and all four are of Samsung Galaxy Note 3.
▰ It is also called Roadblock which is popular in newspaper
advertising too. The objective is to ensure that users do not miss
the ad and get exposed to the brand.
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BUYING MODELS
▰ There are mainly four different pricing models for display ads.
▰ The user has to carefully decide which model is most appropriate for
him/her based on the campaign goals.
▻ Cost per Click (CPC)
▻ Cost per Milli (CPM)
▻ Cost per Lead (CPL)
▻ Cost per Acquisition (CPA)
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Cost per click (CPC)

▰ Cost per click (CPC) is the amount the users are willing to pay for a click on their
ads.
▰ CPC is used solely to drive traffic to the advertiser's website.
▰ They are comparatively less risky because, as an advertiser you only must pay
when someone clicks on your ad.
Cost per Milli (CPM)
▰ Cost per milli, also known as the cost per thousand impressions, is the amount
the advertiser must pay for every thousand impressions served.
▰ The CPM model is mainly used for brand building purposes.
▰ It ensures your ad reaches a wide range of audience but does not necessarily
drive traffic to your website.
▰ This model is preferred by publishers as they get paid irrespective of clicks and
enables better cash flow projections for them. 12
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CPC versus CPM

▰ CTR is an important factor to be considered in order to determine the better of the two:
CPC and CPM.
▰ If you have a high CTR, simply displaying your ads on a website might suffice for you
because the audiences are clicking on ads. On the contrary, if people are not clicking on
your ads and you have a low CTR even after continuous efforts, then you may consider the
CPC model.
▰ You can also calculate effective CPC even if you are bidding on CPM model and then
compare.
▰ Let us take an example here. Let us assume that for a publisher the CPM rates are '80 and
CPC is '8. The average CTR of display ads is 0.2 per cent. Considering the average CTR, the
number of clicks from 1000 impressions will be 2 (1000 x 0.2 per cent). If you buy on CPM
then for 1000 impressions you get two clicks. Hence effective CPC(eCPC)is '40 which is
much higher than the CPC of' 8. Hence, the marketer will be better off buying on CPC in
this case than on CPM and the publisher would prefer to sell on CPM milanvachhani.blogspot.com
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Cost per Lead (CPL)

▰ CPL is the amount you pay as an advertiser for acquiring a lead.
▰ Lead is an intermediate action before final purchase.
▰ It is a micro conversion. It could be a sign up, download of a brochure,
subscription, etc. The objective of the marketer is to acquire leads and nurture
them through continuous engagement for conversions later.
Cost per Acquisition (CPA)
▰ Cost per Acquisition (CPA)is the amount you pay, as an advertiser for acquiring a
customer who buys your product or service.
▰ It typically means the cost of customer acquisition.
▰ This model is mainly used to drive online transactions and is risk free as you only
pay when the user buys.
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▰ The bid price is comparatively higher when compared to the other models.
whereas, the CPM and CPC models may have some suggested bids from the
network (such as GDN), the challenge for the marketer is to estimate the target
CPA.
▰ eCPA may be calculated when bidding on CPC and that can be used to arrive at
target CPA. Let us take an example here. Assume 100 people click on your ad and
land on your website. Assume that out of 100 people, 10 people fill a lead form
and out of them 1 user buys. Assume that CPC is '20. What will be the target CPL
and target CPA? The total cost in this case is '2000 (100 x '20) and eCPL is '200
and eCPA is '2000. Thus marketer can now have a target CPL of less than '200
and it will be a more cost efficient model than the current CPC of '20. Similarly
marketer can have a target CPA of less than '2000 and it will be more cost
efficient than the current CPC of '20.
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Fixed Cost/Sponsorship
▰ In this model, you pay the fixed cost per day irrespective of number of
impressions. Some premium ad placements such as YouTube home page banner
ads are sold on fixed cost model.
▰ A related model is sponsorship. You can sponsor a website or a property, wherein
you have logo presence and some ad inventory as a part of the package deal.
Figure captures the essence of different models.
▰ As a marketer you have to strike a balance between impact, reach and cost
effectiveness. Your plan must have a good mix of sites which will break the
clutter and make an impact, sites that will give you reach and sites that will be
cost effective. Figure explains the execution and outcomes for different buying
models.
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Buying models
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Trade offs in buying models 18
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PROGRAMMATIC DIGITAL ADVERTISING
▰ Programmatic advertising is automated ad buying.

▰ The buying takes place in real time and follows a bidding model.
Hence, it is called Real Time Bidding (RTB) model.
▰ Bidding here takes place for ad spaces in the publisher's webpages.
▰ Programmatic advertising is the most recent development related to
automation in the field of display advertising.
▰ In the US, about 82% of the digital ad spending is programmatic ad
spending
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▰ Programmatic buying signifies the shift from contextual targeting to

audience targeting.
▰ For example, let us assume that you are a car brand. Contextual
advertising means advertising on car portals such as Team-BHP, Autocar
India, etc.
▰ Instead, advertiser can target audiences who may be defined as those
who have visited car portal at least once in the last one month, visited
finance site at least once in the last one month and booked a travel ticket
online at least once in the last one month. This user is more likely to buy a
car. It does not matter on which site the user sees the ad. This is called
audience targeting which is based on online behaviour. It infers intent of
the user and targets based on intent buying. Figure shows programmatic
buying. milanvachhani.blogspot.com
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▰ Programmatic buying reaches the

right audirence at the right time
and place at the right price with
the right message to optimise the
campaign and deliver higher
ROI(Figure)
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Process of Programmatic Advertising

▰ The user requests for a webpage, which means there is a potential to show ad
impressions to the user. Every time a user requests for a page, ad exchange holds
a live auction. On behalf of the publisher, Supply Side Platforms (SSP) send a bid
request to the Demand Side Platform (DSP).DSP examines the potential
impression in terms of target audience and context match and returns a bid
amount based on its value to the advertiser. Winning bid is chosen by the ad
exchange and that ad is shown on the publisher’s website. Figure shows the
working of a programmatic advertising process.
▰ From the process, it is clear that there are many players in the advertising
ecosystem. Let us understand their role and the value they add in more detail.
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Players in Programmatic Advertising Ecosystem
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▰ The ecosystem consists of demand side and supply side which buy
and sell ad inventory, respectively, through an ad exchange as
shown in Figure
1. Publishers
▰ Publishers have ad impressions through which they monetise the
site and it is a major source of revenue for them as most of the
content websites in India are free and hence do not have
subscription revenues.
▰ Big publishers have their own sales team which sells ad inventory to
the advertisers. Typically, they are able to sell some inventory,
largely premium inventory such as above the fold, home page
through direct sales. milanvachhani.blogspot.com
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▰ Since web has millions of sites and unlimited ad space, so there is infinite
supply but demand is limited as there are only few advertisers who are
willing to pay for the ads. Hence, the demand-supply equation is tilted in
favour of advertisers especially in India where ad rates are low as compared
to the world.
▰ The ad inventory which the publishers are not able to sell directly, also
called 'remnant' inventory is sold through 'networks'.
▰ Long tail websites each having small number of unique users and
pageviews cannot afford to have their own salesforce and hence rely on
networks to monetise their websites.
▰ Networks are aggregators of publishers.
▰ Some examples are Google ad network, Yahoo! ad network, Bing ad
network, Tribal Fusion, Vdopia, and Inmobi. milanvachhani.blogspot.com
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▰ Networks were more important few years back but over time their importance has
decreased as other players such as supply-Side Platforms (SSPs) have entered
the ecosystem adding more value to the publishers.
▰ On the demand side, there is an advertiser who takes the help of agencies which
are represented by trading desk that help advertisers in planning, preparing
strategy for bid, determining budget, target audience and goals.
2. Supply-Side Platform (SSP)
▰ A Supply-Side Platform or Sell-Side Platform (SSP) is a technology platform which
enables the publishers to manage their ad impression inventory and maximise
revenue from digital media.
▰ SSP is a yield manager of the publisher. It maximises the yield for publishers by
selling impressions for as much CPM as possible.
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▰ It integrates multiple networks together.

▰ It shares the context of the webpage, such as topic, keywords, page URL and the
profile of the user such as demography, location, device and browser behaviour
with the DSP and requests the DSP to bid for ad impression.
▰ It also shares the cookie ID with the DSP
▰ Some of the SSPs are LiveRail, OpenX, Rubicon Project, Double Click for
Publishers, PubNative and Adjuggler.
3. Demand Side Platform (DSP)
▰ A Demand-Side Platform (DSP) allows the advertiser to buy the inventory from
various ad exchanges and data exchange accounts through one interface called
Real Time Biding (RTB).
▰ The DSPs represent the interest of the advertiser and attempt to find the most
efficient impressions given the constraints imposed by the advertiser.
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▰ They optimise the campaign for a pre-defined strategy which includes goals,
whether maximise clicks or impressions, return on ad spend, budget, target
audience and bid strategy.
▰ Most of the DSPs work on CPM model.
▰ Some of the DSP companies are Double Click for Advertisers, Rocket Fuel, Turn,
Appnexus, Mediamath, Double click, and Audience science.
▰ DSP gets the request for bid from SSP which includes the cookie ID of the user
who is requesting the webpage. Since DSPs have good understanding of
consumer behaviour, they categorise these audiences into buckets such as
fashionistas, golf enthusiasts, avid investors based on their online behaviour, etc.
▰ If someone visits more of finance sites, then the user may be categorised as an
avid investor.
▰ DSPs place ads on behalf of advertisers on publishers' sites. milanvachhani.blogspot.com
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▰ When a user visits the webpage which has the ad impression served by the DSP,
DSP drops third party cookie to the user's browser.
DSPs bring lot of benefits to the advertiser. Some key benefits are:
1. Cost Efficiency - They enable buying at lower CPM as they can participate in
auctions when competition is less.
2. Buying Efficiency - They eliminate need for human interface and relationships and
hence bring efficiency in buying. Sellers do not need to hire sales force and
advertisers need not negotiate with different publishers as the entire exchange is
automated.
3. Real Time Optimisation - Since its highly-automated metrics data comes in real
time with no time lag enabling optimisation of campaigns.
4. Granular Targeting - Sophisticated targeting options are available in DSP including
cookie matching which ensure higher ROI. milanvachhani.blogspot.com
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5. Scale - For remarketing, wherein advertisers target users who visited their sites,
DSPs provide reach and scale as they work with SSPs that have large number of
sites. Similarly, DSPs provide the scale needed for contextual targeting, wherein
advertisers target context or sites belonging to a particular topic or keyword.
Each DSP interacts with more than 15 SSPs and can serve more than 15 billion
impressions per day.
4. Data Management Platform (DMP)
▰ A Data Management Platform (DMP) is used by publishers and buyers to store
and manage audience data from multiple sources.
▰ These sources include publisher's websites, apps, videos, etc.
▰ There are three sources of data. First party data is from sites such as Google,
Linkedln, Facebook, Yahoo! which create data as users create profiles on these
platforms. milanvachhani.blogspot.com
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▰ Second party data is customer

data which is owned by big e-
commerce sites such as
Amazon.com and telecom service
providers such as AT&T.
▰ Third party data is from data
providers such as DMPs which
collect cookie based audience
data.
Types of data suppliers
▰ Adobe Audience Manager, Oracle DMP, Krux, exelate, Bluekai, Datalogix, etc., are
some of the leading Data Management Platforms (DMPs). milanvachhani.blogspot.com
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5. Ad Server
▰ There are ad server technology companies that hosts your ad and give
independent reporting, analytics and verification of display of ads.
▰ It is a good idea to use them as then you are not dependent on analytics given by
the publisher and you know for sure how many ad impressions were served.
▰ Apart from ad verification and analytics, these ad servers have good technological
integration capabilities and hence integrate well with DSPs and publisher sites for
display of ads.
▰ They also enable dynamic creative optimisation which enables customisation of
ads for different target groups and placements. For example, the ad can show
bright sunny image when ad is shown in the morning and light dull image in the
evening. The creative can be updated dynamically by the creative designer from
his laptop, without having to upload multiple versions through, email or other
manual coordination.
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▰ The creative must be prepared in two file formats: .swf file for
parent file and .xml format for child file. The parent file is the
template that identifies where heading, call to action button or
image and description will come. The child file is the data that gets
pulled dynamically in the parent file format. Hence, the creative
designer can update the data in the child file dynamically anytime
and set rules for customising the ad.
▰ Hence, while media optimisation is done by DSP, creative
optimisation is done by ad servers. Ad servers charge a small per
cent of media spend for the fees. unfortunately only 40 per cent
advertisers in India use third party ad servers as they consider it as
cost. milanvachhani.blogspot.com
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6. Ad Exchange
▰ Ad exchange brings together buyers and sellers to buy and sell online ad inventory
in an automated manner.
▰ Like a stock exchange, real time auctioning for ad spaces on publishers' websites
happens in an ad exchange.
▰ Ad exchanges are of two types.
▰ Open Exchanges: Open exchanges, as the name suggests, are ad exchanges open
for everybody on the web. There is no restriction on the purchase of inventory
available in these exchanges. They are run by tech giants such as Google, Yahoo!,
OpenX, etc. Over 70 billion ad impressions flow through these exchanges daily.
▰ These volumes have made policing the genuineness of these impressions
extremely difficult and this has given rise to bogus and low quality impressions.
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▰ Open exchanges allow buyers to purchase media on an audience

basis through cookie-based targeting;
▰ Private Exchanges: The problem mentioned above led to the
creation of private exchanges wherein a group of publishers pooled
up to sell their advertising inventory only through select agencies or
to reputed companies. This type of selective selling has helped
prevent fraudulent activities as seen in open exchanges.
▰ Also, these exchanges are considered to be premium exchanges as
advertisers get better ad placements, insights, etc., as compared to
open exchanges.
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7. Real Time Bidding

▰ Real time bidding (RTB) includes any transaction executed on an
individual impression basis and in which pricing is determined in
real time.
▰ It works in open auctions as well as private auctions.
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ANALYTICS TOOLS
▰ There are some challenges plaguing the display advertising industry.

▰ Fortunately some companies have devised tools to overcome those challenges.
Let us look at some of these issues and futuristic solutions.
1. Viewability
▰ Per Integral Ad Science & Media Rating Council Data in 2015, 57% of display ads
were not viewable.
▰ Ad may not be visible due to disruptive human behaviour, such as action taken
before ad loads and renders, multitasking or because of low-quality or
compromised pages. It could be because ad loads in area out of the user's
browser, or frequent page refresh prevents ad load, or web load gives errors.
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▰ It should be noted that 50% of ad pixels should be displayed for a

minimum of one second in image ads and two seconds for video
ads for an ad to be considered viewable. This condition has been
prescribed by Media Rating Council in May 2015.
▰ If both the pixel and time components associated with an ad are
greater than zero, but one or both do not meet or exceed the above
minimum requirements, the ad may be referred to as a 'loaded ad'. It
should not be associated with the term 'impression'.
▰ To overcome this viewability issue, tools such as Integral Ad
Science and MOAT provide metrics such as in-view impressions, out
of-view impressions, viewable rate.
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2. On Target Reach
▰ The current cookie based methods of targeting overestimate reach
and underestimate frequency by a huge margin. The demographics
accuracy is also low. Some tools such as 'Atlas' is used to measure
On-target reach publisher wise for each campaign.
▰ It is based on logged in FB data. Nielsen DAR is another tool. They
do cross device measurement and provide reach overlap reports.
▰ These tools determine accuracy based on real people logins across
mobile and desktop. They enable people-based marketing and
understanding of the consumer journey.
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3. Ad Fraud
▰ Ad fraud is the purposeful practice of serving ads that have no potential to be
viewed by a human. Person behind the ad fraud are criminal gangs and the
problem is costing the ad industry a lot of money.
▰ Publishers with higher cost-per-thousand (CPM) rates are more susceptible to
bots, which generally create millions upon millions of ad impressions that are
seen by no one but often get charged to marketers as a viewed promotion.
1. Domain Identity Theft - This is a form of fraud where fraudsters add a fake URL
into the ad unit, fooling the auction into believing that an ad will appear on an
acceptable site that it will not end up on.
2. Click/Impression/Conversion Fraud - This is when fraudsters mechanise clicking,
viewing or converting on ads. click farms exist where people are paid to sit and
click, view, or convert on ads through desktop and mobile devices.milanvachhani.blogspot.com
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3. Bot Activity - This is when robots carry out similar actions by masking IP
addresses through advanced algorithms. Malware can be installed on
computers, giving fraudsters the power to control what domains a computer
visits and the ads it views.
4. Ad-stacking - This is when multiple ads are served within the same placement.
This method tricks ad servers, as each of the ads is served; however, they are
stacked beneath each other so the advertiser's message is often not viewable.
5. Pixel Stuffing - when an ad of say 300 x 250 pixels is crammed into 1 x 1 pixel
size which makes it appear on page but is invisible to human eye.
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4. Brand Health
▰ The process and controls implemented to protect advertisers from having their
ads appear alongside content that could damage their brand or reputation (even if
by accident). Examples of brand safety issues are:
1. Ads appearing on sites publishing illegal content. For example, adult, illegal
downloads.
2. Ads appearing alongside user generated content. For example, controversial
opinion.
3. Ads presented in a negative context due to content on the site. For example,
flights alongside an air disaster.
▰ Brand safety is ensured by blacklisting websites having controversial content;
using keywords to not show ads in that context and by labeling content for adult
use, etc. Integral Ad Science tool assigns brand risk scores to prevent brand
health from getting compromised.
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YOUTUBE ADVERTISING
▰ YouTube is the second largest search engine in the world behind Google
search. According to the official statistics by YouTube, it has over one
billion users - almost one-third of all people on the Internet.
▰ With such immense audience presence, it is a great platform to promote
your company. Marketers on YouTube have two broad areas of
participation: (i) YouTube channels, and (ii) YouTube ads.
1. YouTube Channels
▰ Companies can promote their brands and products by creating quality
video content and curating it into a YouTube channel or profile. This will
aid discovery and engagement whenever someone searches for relevant
content on YouTube. 44
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2. YouTube Ads
▰ YouTube allows you to capitalise on the millions of partner videos
already present on YouTube, by targeting your display ads to
relevant videos. These ads are available in two different formats.
▰ The most widely used formats are as follows.
Display Ads
▰ These ads appear next to your video while you are using YouTube
on a laptop or a desktop. This ad format is not available on the
mobile device and can be purchased in both CPC and CPM formats.
Figure shows a display ad by Google Chrome on YouTube.
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Display ads Overlay Ad
Skippable video ad Native mobile ads 46
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Overlay Ads
▰ An overlay ad appears in a rectangular format in the bottom 20% of the video. It is
available only on a laptop or a desktop and not on a mobile devices, TVs, game
consoles, etc. Viewers can dismiss the ad anytime and can be purchased only in
the CPC model. Figure shows an example of an overlay ad.
Skippable Video Ads
▰ Skippable video ad is the most popular advertising format on YouTube. Viewers
can skip the ad after watching it for five seconds. It can be inserted before, during
or after the video and is available on desktop, TVs, gaming consoles and mobile
devices. It has a very unique buying model wherein the publisher is paid only
when a user watches 30 seconds of the video or till the end of the video -
whichever comes first. Figure shows a skippable video ad.
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Non Skippable Video Ads

▰ Non Skippable Video Ads are 15-20 second long video ads which can be inserted
before, during or after the YouTube video.
▰ For these ads, the publisher gets paid only when a user fully watches the ad.
Mid-roll Ads
▰ Available only for videos over 15 minutes, mid-roll ads are spaced between the
video similar to TV commercials.
▰ For better viewing experience, publishers can choose to place their ads at natural
pauses between the scenes.
▰ They are available only on desktop and mobile versions and not on game
consoles, TVs, etc.
▰ Further, these mid-roll ads could be skippable or non-skippable adsmilanvachhani.blogspot.com
and the
pricing model is as per the chosen format (i.e., skippable or non-skippable). 48
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Bumper Ads
▰ Bumper ads are lightweight, non-skippable video ads up to 6 seconds long. They
are especially optimised for mobile devices. Similar to non skippable ads, the
publisher is paid only when the user fully watches the ad.
Native Mobile Ads
▰ Native mobile ads are display ads that appear in the same context as organic
content. As the name suggests, these ads are only available on the mobile device
and can be bought on a CPC or CPM basis. Figure shows a native mobile ad for
app install of MCR.
Discovery Ad
▰ The billing pattern in case TrueView Discovery ad is relatively simple. You are
charged whenever a user clicks on a video ad thumbnail or title and begins
watching your ad video.
▰ YouTube skippable ads and discovery ads that come in the search milanvachhani.blogspot.com
results are
called true view ads as users choose to see the ad by their own volition. 49
3. Type of Videos
▰ Your ads can appear in any video which has claimed copyright. It could be a user-
generated video or broadcast channel videos or YouTube partner videos. On
YouTube, users do not prefer to click and leave the site. Hence you should create
videos which are standalone and are effective without requiring the user to go to the
landing page.
▰ Since popular YouTube ad formats are true view formats which require users to
choose to view the ad, hence you must make your first five seconds, when the user
can skip, very compelling. Infact, you must try to communicate the message in the
first five seconds itself.
▰ Hard sell commercial style ads are more likely to be skipped. Hence you must create
content especially for YouTube instead of using your TV commercials. Some popular
types of videos for YouTube are 'How To', testimonials, emotional story, behind the
scenes, provocative content. It is also a good idea to keep the videos short, say of
about 30 seconds. 50
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4. Buying Models
▰ The buying models on YouTube can broadly be divided into two major categories.
1) Bidding Model
▰ The YouTube bidding model is a standard auction based model.
▰ Most aspects of the model are similar to display advertising buying models
discussed in the previous sections. Apart from those, video content has a unique
metric called cost per view (CPV).
▰ Cost Per View (CPV)
▰ CPV is the amount you pay for your true video ads. With CPV bidding, you will pay
for video views or interactions (such as clicks on call-to-action overlays). A view is
counted when someone watches 30 seconds of your video ad (or the duration if it
is shorter than 30 seconds) or interacts with the ad, whichever comes first.
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▰ Actual CPV: As an advertiser, you always do not pay the max CPV amount.
As it is a competitive bidding model, you might often strike deals at a
lower price relative to your max CPV. This price at which you strike a deal
(i.e., the actual amount you are charged) is called the actual CPV.
▰ The actual CPV you pay depends on two factors. They are:
▰ Quality Score and Ad Rank Quality score is a measure of how relevant your
ad is to a customer and includes multiple performance factors such as
view rates or click rates. This quality score is further used to determine
the ad rank.
▰ AdRank is the product of your quality score and max CPV. Based on this
ad rank, all the bidders are ranked sequentially and the top ranker wins the
bid. The formula is:
AdRank = Max CPC x Quality Score 52
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▰ If your quality score is low you have to bid high. Hence, advertisers should try to
have high quality score by ensuring high CTR or view rates or interaction rates so
that CPC remains low.
2) Reserved Media placements
▰ The reserved media placements model follows a fixed pricing model wherein you
buy placements on a reservation basis instead of an auction basis.
▰ These campaigns are highly beneficial if you want to build instant brand
awareness. For example, if you are launching a new product or entering a new
market. Moreover, you have a clear picture about your spending pattern and
budget. The reserved media placements can be bought mainly in two modes.
▰ Cost per Milli (CPM)
▰ Cost per Day (CPD)
53
Cost per Milli (CPM)

▰ In a CPM campaign you are billed for every 1000 impressions. It has to be
booked six business days in advance and the creatives have to be
delivered at least four business days in advance. The ad formats which
fall under this mode are:
▰ Standard In-Stream: These are non-skippable video ads that play before
the user streams the actual video. They are optimal if you want to
communicate a simple yet powerful message and can be of 15 or 30
seconds.
▰ In-Stream Select: In-stream select are skippable ads which appear before
the actual video (pre-roll). The ad can be up to 60 seconds long and the
user is allowed to skip the video after 5 seconds and an impression is
recorded, irrespective of the user skipping the video. 54
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Cost per Day (CPD)

▰ CPD campaign is the amount charged to publish your ad for an entire day.
▰ The CPD campaign has to be booked couple of weeks in advance and the
creatives have to be delivered nine business days in advance. The ad formats that
fall under CPD are as follows.
▰ Desktop Custom Masthead: It is a 970 x 250 pixel ad unit that spans the entire
breadth of the YouTube homepage below the navigation bar
▰ Desktop Universal Video Masthead: The desktop universal video masthead
includes a flash information panel on one side and a video panel on the other
side. The flash panel can open/close whenever someone clicks on it. The
standard size of this ad unit is 780 x 195 pixels.
▰ Mobile Video Masthead: A mobile video masthead, as the name suggests, a
mobile/tablet only ad unit. It consists of a video headline, description, channel
name, call to action and thumbnail. 55
Desktop universal video masthead
Mobile video masthead --> 56
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5. Targeting and Optimisation

▰ YouTube ads can be targeted and optimised like other display ads.
▰ The various targeting options available are based on topics,
interests, affinity audience, demographics, etc.
57
WHY PAY FOR SEARCH ADVERTISING?
▰ Organic results are free then why should a marketer spend money on
paid results?
▰ A marketer could build an excellent website and invest in SEO
techniques to get the highest rank for the website in organic results;
however, despite the best efforts, the website may not come on top.
▰ The algorithm for organic results is complex and not under the control
of the marketer. It is dynamic and a small change in it can dramatically
change the ranking of page competitors' websites may be more relevant
for certain search queries.
▰ In comparison, marketers could secure a higher position on paid results
by paying for the ads. milanvachhani.blogspot.com
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▰ Few reasons why companies should consider paid search

advertisements are-
1) intent
2) ease of action
3) controlled costs
4) analytics
5) competition
59
1. Capture Intent
▰ The advertisement is shown to people who are searching for terms that are
relevant to your business. These people are actively searching because they are
interested in either finding out more information about product or service or are
buying it.
▰ Hence they have both interest and intent; the user is in the market for the product
or service. These users are more likely to click on the ad and buy the products or
services.
▰ It is called a pull medium as the user seeks the advertisement. This is the primary
reason why click through rates are the highest for search advertising among all
platforms of digital advertising such as display ads, social media and email.
Contrast this with traditional media advertising where It is more of a spray and
pray approach wherein the marketer gives advertisements in the hope that some
people will be in the market to buy those products or services.
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2. Ease of Action
▰ Search engine ads are meant to be clickable.
▰ Once a person clicks on the ad, the search engine directs the user to the brand's
web page, custom designed for the ad.
▰ The web page has easy navigation links to various parts of the website, phone call
options, integration with maps to locate the business easily, and hence enables
the user to find relevant content.
3. Controlled Costs
▰ Search engines charge a marketer only if a person clicks on the ad (CPC model).
The advertisers are not charged for impressions. One can control how much they
are willing to pay for each click.
▰ There is no base charge for creating the ads. milanvachhani.blogspot.com
▰ Additionally, advertisers can also control how much they wish to spend each day. 61
▰ An account can be charged on a prepaid model where the advertisers transfer

money to Google, and subsequent costs are deducted from this amount. In this
way, total expenditure is always within one's control. Once the money is deposited
in the Adwords account of Google, one can generate expense reports to submit to
the accountant or to the client.
▰ An alternative is a post-paid model.
4. Analytics
▰ Search engines help in creating and downloading reports about the performance
of ads. One can view statistics such as-average cost per click, the number of
clicks for each ad, the total amount spent, the click though rate, and the number
of impressions to analyse the effectiveness of their campaigns.
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5. Competition
▰ In a scenario where the brand's web page is of a higher quality as compared to
their competitors' and is most relevant to the search query entered by the user,
there is a high likelihood that the advertiser's website will be listed as the first
result. Why is there then the need to place ads? It can be seen many times that
while searching for a term, a company's website is found to be listed as a top ad
and as first in the organic results. Is the company then wasting money on
advertisements? The answer is no-simply because, even though one company
may earn the first rank in organic results, they are leaving the ad space open for
attack by competition. If the company does not bid for the ad, then the
competition will bid and win it. The result would be that even if that respective
company has won the top place through SEO, their competition will be listed
higher than them on the results page through paid ad. So, one must bid for top ad
slots not for visibility alone but to prevent competition. milanvachhani.blogspot.com
63
▰ For example, when Flipkart ran the campaign-Big Billion Day-during

Diwali, Amazon showed ads against the keyword and purchased the
'Big Billion Day' domain name.
▰ When users clicked on big billion day website, they were redirected
to the Amazon site.
▰ Amazon also showed ads on web pages which had the keywords-
Big Billion Day. This is an example of online ambush marketing.
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UNDERSTANDING AD PLACEMENT
▰ Search engines show

advertisements in
predefined areas on the
result pages.
▰ Google shows ads in two
areas-top and bottom.
Maximum four ads can
appear on the top and
three at the bottom.
▰ Figure shows a typical
Google search result
page. milanvachhani.blogspot.com
65
1. Top
▰ The top position is considered as the prime location in Search Engine Results
Page (SERP). Users usually click on results on the first page and that too which
are above the scroll. How many times do we to the second or the third page of the
results? It is therefore clear the competition is for the top four positions on the
first page.
2. Side
▰ Until 2015, Google showed ads on the side too. Importantly, the side had only ads
and no organic results, so users naturally paid more attention to the results of the
main section (left) and less to results on the side (right). Left side ads are called
native ads as they come in the same place where organic results come.
▰ Sometimes a map would come on the right side above the ad.
▰ Now the right-side ads have been discontinued to align the user experience on the
desktop with mobile since on mobile there is no right side.
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▰ Google categorises the bottom ads as 'others'. The 'other' ads are unique for each
page of the results. Ads in the 'other' slot, however, may get shown in the top slot
in one of the result pages.
3. Bottom
▰ If the AdRank for an ad is lower
than the threshold for the top
position, in that case even if the
top position does not show any
ads, this ad is shown in the
bottom area.
▰ Figure shows an example of an
ad appearing at the bottom of
the page.
67
AD RANKS
▰ AdRank is the position at which the ad appears in the search engine

results.
▰ A study by Chitika (2013) has shown that results that appear in the
top three positions combined attract more than 60% of traffic
compared to all other results.
▰ The traffic decreases exponentially as we go down the PageRank.
▰ For AdRank we will learn 3 thinks
1. Basic Ad Auction Model
2. The Ad Auction Model
3. Why is AdRank Important? milanvachhani.blogspot.com
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1. Basic Ad Auction Model

▰ Do you know that Google is not the first search advertising platform?
▰ Overture was one of the early players in the market; it launched paid
search advertising service in 1998.
▰ Google launched its paid advertising do-it-yourself platform-AdWords-in
the year 2000.
▰ In 2003, Yahoo! acquired Overture.
▰ The initial auction model ranked ads per bid amount placed by an
advertiser for the keywords.
▰ This auction system was simple to implement. However, it was not
successful. This is because, firstly, this model leads to bidding wars.
69
▰ Example: Suppose one bids '2 for the keyword 'grocery shopping'. To outrank this
bid, their competitor raises the bid by '1. This leaves the first bidder with no option
but to increase the bid to exceed that of the competition. This will continue until it
becomes unaffordable for one of them to bid for that keyword.
▰ This practice is especially unfair to small businesses that would not be able to
compete against large corporations. The second problem with this model is that
the quality of ads is not considered. A user might see ads that are not relevant to
the current search just because the advertiser has bid high. This would ultimately
result in a bad user experience. Google launched Quality Score measurement
system in 2005, which reduced the importance of bid amount in determining
AdRank.
▰ Note: Do you know that until 2005 all the ads on MSN search were served by
Yahoo!? In 2006, Microsoft severed ties with Yahoo! And created its ad-serving
platform. In 2009, the MSN search evolved into the Bing search engine. milanvachhani.blogspot.com
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2. The Ad Auction Model

▰ Over the years, search engines have refined their auction process to reward
advertisers that show quality ads that are relevant to the user query. The
algorithm of Google search ads is as follows:
AdRank = Maximum bid x Quality Score
▰ Although Google does not provide weights of

the components of Quality Score, but some
analytics companies have analysed the
Quality Score of large scale number of
keywords and drawn some inferences about
weights, as given in Figure milanvachhani.blogspot.com
Components of an advertiser's quality score
71
Setting the Right Bids

▰ A search engine gives the option to set the maximum amount that
will be spent on each ad.
▰ Advertisers must explore options to set their ad bid amounts
manually. It is important to remember that bids are set for keywords
and would apply to all the ads that are configured for that keyword.
▰ The buying model in search advertising is CPC. So, pay only when
they get traffic on their website from the search engine.
▰ It is evident that in India more clicks happen on desktop than on
mobile as compared to other countries. Internet and smartphone
penetration in India is less and users are not doing as much search
on mobile as on desktop. 72
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▰ CTR is highest for search ads as they capture the intent of users
and are a pull medium.
▰ Search engines give an estimated bid amount for each keyword.
▰ One may start bidding at 70 per cent of the suggested bid and
gradually raise it if the ad is either not showing or showing at lower
positions than desired. Search engines also send an alert
irrespective of whether the bid amount one has selected is enough
to show their ad or not.
▰ The quality score consists of three components-
1. Landing page,
2. CTR milanvachhani.blogspot.com
3. Relevance 73
i) Landing Page
▰ Each ad has a target URL configured for it which upon clicking takes
the customer to the landing page.
▰ The content of the landing page must match the ad. In addition to
the content match, search engines would also look at the quality of
the landing page.
▰ It should be easy to navigate and has quick load time.
▰ Some issues that can lower the landing page quality are pop-ups,
too little content, many links, non-readable content (like images,
PDFs,flash content), dynamic or passcode-protected content that
cannot be read by the search engine, etc. milanvachhani.blogspot.com
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ii) Expected Click Through Rate

▰ Once the ad starts showing, click through rate (CTR) is the feedback that
the user is giving to the search engine.
▰ If more people find the ad relevant and interesting, they will click on the
ad, and the CTR will go up. In contrast, if very few people find the ad to be
relevant or interesting, they will not click on it, and CTR will go down.
▰ CTR is the most important factor having highest weight. A poor ad might
be shown initially because either very few advertisers are bidding for the
keyword or the bid amount is set high. However, if people do not click,
then the CTR will go down, and the ad will stop showing even if the
competition is low. The bid amount can be increased further, but search
engines will not show ads that have quality scores below the threshold. A
high CTR can lead to a high quality score. milanvachhani.blogspot.com
75
▰ Since the bid amount and the quality score are the two factors determining
AdRank, a high CTR can result in showing the ad even at lower bid amount.
Thus, a high CTR can help in saving money on the bidding amount.
▰ Example: In one instance, it was seen that an ad for a company had a low bid
amount, and hence was showing in the seventh position. Although the CPC
was low, the CTR was also low. Bid for top position was much higher than
what the company was bidding. The company increased the bid amount, and
the ad started coming on top position, which increased the CTR from 7 per
cent to 10 per cent. This led to a high quality score and reduced the CPC.
These effects may not be visible immediately. In this case, the company had
to be patient for 3-4 days. The CPC was as high as '35 initially and declined
later to '17. All this time, the company controlled the daily budget for the
campaign, and hence the overall expenditure remained within control.
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iii) Relevance
▰ Search engines give importance to relevance since high relevance
indicates better user experience. What is meant by relevance?
▰ It has a two-fold meaning, firstly, whether the search query of the
user matches with the keywords that the brands are bidding for, and
secondly, whether the keywords are appearing in the ad headlines
and description.
▰ Out of all the components of quality score, relevance is the easiest
to change and control. Hence, a new advertiser must strive to
improve the quality score by improving relevance.
77
3. Why is AdRank Important?

▰ Marketers desire users to click on their ads. Three psychological factors influence
consumers to click on ads.
1) Primacy Effects
▰ The individuals tend to recall the information presented to them first, better than
the information they are made privy to later. This tends to make the user think
that the information presented first is more significant than that presented later.
▰ Research by Solomon Asch (1946) illustrates this effect very well. He asked
people to rate a person described as 'envious, stubborn, critical, impulsive,
industrious and intelligent'.
▰ He then asked others to rate a person described as 'intelligent, industrious,
impulsive, critical, stubborn and envious'. The second group rated the person
more highly than the first group.
▰ This implies a very strong effect of position on choice behaviour. 78
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2) Competition for Attention Theory

▰ Desimone (1995) argues that it is important for an individual to prioritise which of
the many items presented is to be processed. Djamasbi' et al. (2010) find that the
position of a particular item has an influence on the individual's choice to process
it. As Faraday (2000) suggests, individuals tend to consider items higher up on
the list as more important.
▰ Considering viewing each link as a sequential cognitive activity, competition for
attention theory suggests that individuals can only process one of these visual
stimuli at a time. Ad in higher position has a better chance of being processed
than an ad in lower position.
3) Information Overload
▰ Information overload is the phenomenon of what happens when one 'receives too
much information'. Academic literature states that when individuals are exposed
to higher levels of information than can be easily processed, they tend to make
poorer decisions (Eppler and Mengis, 2004). 79
CREATING THE AD CAMPAIGN
▰ To better understand the following sections, we will take the case of

Ram's online grocery store in Bengaluru. To get more control on the
position where his website appears on search engine result page, he
decides to go with Google search advertising. We will start by
creating a basic advertising campaign for his business. The concepts
in the following sections apply to all the main search engines;
however, for specific examples, we will consider Google search
engine.
▻ Architecture of search Advertising Account
▻ Best Practices for Creating Effective Ads milanvachhani.blogspot.com
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Architecture of search Advertising Account

▰ Google provides an online platform called Adwords to create and manage one's
online advertisements.
▰ Advertisers must create an account to use Adwords, which is organised like a tree
structure.
▰ One should try to mimic their website structure in the account structure-create
separate campaigns for different product lines or services.
▰ For example, an online grocery store can have separate campaigns for each of
the product categories like 'home care products', 'personal care items'. This would
allow the advertiser to allocate independent budgets for each product category.
▰ A campaign can contain multiple ad groups. Within the product category of home
care, each sub-category such as detergents, cleansers could be different ad
groups. Each ad group should have related items since the set of keywords is
defined at ad group level. milanvachhani.blogspot.com
81
▰ For each ad group, depending on the number of products and benefits offered by
the online store, one could have one or more ads. Figure shows an example of an
Adwords account structure for an online grocery store.
▰ If their business serves in several areas, one might create a separate campaign
for each location. For example, if a store has two branches, one in the US and one
in India, the advertiser has to set up two separate campaigns, each targeting one
of the locations as budget and bids will vary accordingly. Similarly, if one is
running discounts on certain products and wants to allocate greater budget to
advertise that product, then they should run it as a separate campaign as the
budget setting can be done only at the campaign level.
▰ The account structure should be created thoughtfully as reorganising the account
will delete accumulated data and affect the performance of ads.
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AdWords account structure is

divided in 5 parts as shown in
picture (Example of Glocery
Store) and following.
1. Google AdWords
Account
2. Campaigns
3. Ad Groups
4. Ads
5. Keywords
83
1. Google AdWords Account

▰ In case the advertiser has an existing account with Google, they can use the same
details to log in to Adwords or Create account in Google AdWords.
2. Campaigns
▰ An important setting at campaign level is the daily budget which allows to set a
maximum daily expenditure possible for the campaign.
▰ One can have multiple campaigns region-wise to save cost.
▰ If the target audience is more in Mumbai, then they must keep the budget higher for
Mumbai, and lesser for the other regions. Also, the bidding rates for keywords will be
different in different markets. For instance, rates are likely to be higher in metro cities
such as Mumbai as compared to tier-2 cities. Putting them together in the same
campaign would mean that the advertiser will have to pay higher rates even for a tier-
2 city. One company targeted the US, Australia, as well as the UK in a campaign.
Agency suggested separate campaigns for separate countries and it reduced the cost
by 40 per cent.
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▰ An important setting is bidding model where the advertiser can

choose among cost per click (CPC),cost per acquisition (CPA),or
cost per lead (CPL).
▰ Most advertisers go for CPC model, but they independently track
conversions as well.
▰ Another important setting is location. It can be of two types- (i)
geographical location, and (ii) location of interest.
▰ One can create ads in different languages depending on their target
customers. For example, an Indian cuisine restaurant located in
Switzerland may want to target Indian travellers in Switzerland, and
hence might want to create ads in Hindi or English rather than in
French or German. 85
3. Ad Groups
▰ Each campaign is made up of one or more ad groups.
▰ An ad group is a bundle of keywords and ads. The best practice is to have 10-15
tightly themed keywords in an ad group.
▰ Advertisers can make multiple ads in an ad group.
▰ When a user searches for a keyword, the ads are shown in rotation.
▰ In Adwords, an important setting done at the ad group level is default bid.
▰ This bid is then applied to all keywords.
▰ One can also set bids for individual keywords. In such a case, keyword bids will
override the ad group bid.
▰ We will create a search campaign for our exercise. For understanding, let us
create two ad groups, one for groceries and other for fresh fruits and vegetables.
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4. Ads
▰ Google provides a preview tool for ads within Adwords where one
can view the ads that are running based on device and location
settings.
▰ It is strongly recommended that the advertisers use the preview tool
to know if their ads are showing or not for certain keywords.
Anatomy of a Search Ad:
▰ An ad shown on the search engine has three main components-
(i) headline,
(ii) description, and
(iii) URL. 87
▰ Due to the limitation of the space available for an ad, there is a maximum limit for
characters for each of the fields.
▰ It is 30 characters for the headline and 80 characters for description line.
▰ Two headlines of 30 characters, each can be given and they are joined by a
hyphen. In mobile, the description can come in two lines depending on the screen
size.
▰ For our exercise, we decided to create two ad groups-groceries, and fruits, and
vegetables. Within each ad group, you should create at least two ads with
different customer benefit and product proposition.
▰ For instance, one ad in fruits and vegetables can talk about freshness, sourced
directly from the farm; whereas another ad can talk about a wide range of greens
and vegetables, availability of imported vegetables.
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5. Keywords
▰ Keywords are the single most important component of the search advertisement.
▰ Keywords determine the search terms for which the ads will be shown.
▰ Appropriateness of keywords would determine if the ads are reaching the target
audience or not.
▰ Poor choice of keywords will not show the ads to target customers or cause one
to spend more on their campaigns or both.
▰ One should use match types to narrow down their target audience. Keywords
should be relevant to the search term as well as the ad.
▰ Keywords can be short tail or long tail. Short tail keywords are few keywords with
high search volume. Long tail keywords are phrases each of which has small
search volume but together they add up to a significant per cent of all searches.
89
▰ An interesting research by Skiera, Eckert and Hinz (2010) shows that the top 20
per cent of all keywords attract on average 98.16 per cent of all searches, and
generate 97.21 per cent of all clicks.
▰ To promote Ram's website, the advertiser will have to study the keywords that are
most appropriate for a grocery store. They must use a keyword planner tool
within AdWords to choose the right keywords. They can get a list of suggested
keywords with the monthly search volume for a defined geographical location, the
intensity of competition, and suggested bid. One can also get ad group
suggestions. It is the best to download the report in a spreadsheet.
▰ The advertiser can start with 70 per cent of the suggested bid and if the ad does
not show or shows in lower positions, increase the bid gradually. Try to limit the
number of keywords to 10 in each ad group. If the bid amounts for the selected
keywords are high, try to change the keyword combinations, and make them more
focused or long tail. milanvachhani.blogspot.com
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Best Practices for Creating Effective Ads

▰ Some ads are more clickable i.e., the content of the ad lends itself
easily to clicks from users. These ads attract the attention of
viewers and thus give better CTR to the advertiser. Following Table
shows few tips to consider for creating effective ads.
Tips for Creating Effective Ads 91
Some basic things that you should keep in mind while creating the text ads are as
follows:
▰ Highlight the USP(unique selling proposition) of the business.
▰ Include time-specific elements that benefit users such as discount, promotions,
offers, etc.
▰ Include a call-to-action or active verbs like 'purchase', 'avail discounts', 'order
now', and so on.
▰ Include keywords in the ad content. This will increase the relevance of the ad to
keywords.
▰ Create multiple ads for different benefits and rotate them for keywords, instead of
trying to fit all content in one ad.
▰ Match ad text to landing page content to get a higher quality score.
▰ Monitor ads closely to see which ads perform better. The ads that do not have
acceptable performance should be modified or removed. 92
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PERFORMANCE REPORTS OF AD
▰ Advertisers must generate performance reports for campaigns, ad

groups, keywords, and ads.
▰ These reports can be easily generated from the 'Reports' tab in
AdWords.
▰ One can pause or modify weak performing units and put more budget
on high performing units.
▻ Segments
▻ Search Terms
▻ Auction Insights milanvachhani.blogspot.com
93
1. Segments
▰ In AdWords, Segments is an important tab for slicing and dicing the data and
monitoring performance.
▰ One must check the performance of their campaigns by 'time'. For an online
grocery store, it will be useful to check whether the campaigns perform better on
weekends or weekdays.
▰ Comparing CTR of ads showing on Google with that of ads showing on all the
search partners of Google is also helpful. If there are four site links for different
product lines, the advertiser must know which product is getting more clicks.
▰ Another useful segmentation is by device wherein one can compare CTRs and
conversions on a tablet, mobile, and desktop.
▰ The ad may come in the top position, or other position; the advertiser must
compare the performance of ads in different positions. They can also check how
many clicks are coming and from which geographic locations.
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2. Search Terms
▰ Search Terms is one of the most useful reports; it shows the search
terms that users queried that triggered their ad.
▰ It also indicates the match type whether broad, phrase, or exact.
▰ One must consider adding those search terms which have high
clicks or conversions to their keywords list, which will make their list
comprehensive over a period. From the search terms report, one
can directly add keywords to their list.
▰ They can also identify negative keywords from this report.
95
3. Auction Insights
▰ This report is useful for getting some insights about other players
who are participating in the same auction as the brand, and check
their performance regarding impressions, ad position, Adkank, etc.
▰ This report enables one to understand who are their key
competitors, what is the average position of their ad, what per cent
of times their ad has overlapped with them, and what per cent of
times one has outranked their competitor.
▰ This report is only for giving insights as it is only based on sample
data.
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Digital Marketing Mix
▰ The digital marketing Mix is essentially the same as the marketing mix. The four Ps
are controllable variables which, when planned and carefully mixed together in the
right way, satisfy customers.
▰ It is simply the adaptation of 4Ps - price, place, product and promotion to the
digital marketing context.
▰ We could also include physical evidence, people and process when marketing
planning for an online service. So basically it is 7Ps
▰ The 7Ps model was originally devised by E. Jerome McCarthy and published in
1960 in his book ”Basic Marketing”. A Managerial Approach.
▰ Marketing touches every part of the corporation. One way of structuring, or
categorizing, the set of decision variables is through the marketing mix. There are
several different approaches including the 4Ps and 7Ps. These havemilanvachhani.blogspot.com
to be re-
evaluated for the new media. 97
▰ The 7Ps which are

explored are:
▻ Price
▻ Place
▻ Product
▻ Promotion
▻ People
▻ Physical evidence
▻ Processes.
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Price
▰ The Internet is changing pricing for ever. Prices are under pressure.
▰ Marketer should change product, place or promotion in some way
before resorting to pricing reductions. However price is a versatile
element of the mix as we will see.
99
▰ The price charged for products and services is set artificially low in
order to gain market share.
▰ Once this is achieved, the price is increased. This approach was
used by France Telecom and Sky TV.
▰ These companies need to land grab large numbers of consumers to
make it worth their while, so they offer free telephones or satellite
dishes at discounted rates in order to get people to sign up for their
services. Once there is a large number of subscribers prices
gradually creep up. Taking Sky TV for example, or any cable or
satellite company, when there is a premium movie or sporting event
prices are at their highest – so they move from a penetration
approach to more of a skimming/premium pricing approach. milanvachhani.blogspot.com
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Place
▰ What new distribution options are there for customers to experience
our product, e.g. online, in-store, mobile etc.
▰ Distribution, or place, is crucial to the success of any enterprise.
Assuming your organization has a reasonable product or service,
online or offline the principle is the same: increase your
representation and make it widely and readily available to target
customers. Marketers today need to think of multi-channels for
distribution to ensure they make their products and services easily
available to as many ideal customers as possible.
101
Product
▰ This is about How can you develop your products or services?
▰ Find the ideal product that you can deliver, can afford, are good at, can protect
and go for it.
▰ The online world allows you to create a whole range of new versions, variations
and even new products and services. Finally, play to your strengths and exploit
your distinctive competitive advantage by having a strong and clear online value
proposition (OVP).
▰ The OVP must somehow reinforce core brand values and clearly summarize what
a customer can get from you online that they cannot get elsewhere.
▰ Ghosh (1998) suggested companies should consider how to modify product and
add digital value to customers. These are huge questions that can reshape your
whole business. milanvachhani.blogspot.com
102
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Promotion
▰ Promotion is how marketing communications are used to inform customers and
stakeholders about an organisation and its products
▰ How can we add to or substitute the combination within paid, owned and earned
media channels?
▰ This lesson looks at ways of increasing the popularity of your website by looking
at the internal optimization of the website itself. It considers many important
ways of building your traffic, including Search Engine Optimization (SEO)
approaches.
▰ All ten communications tools (see image) should be reviewed for how they can be
extended and enriched online. Online communications challenges include: mix,
integration, creativity, globalization and resourcing. Take advantage of the
characteristics of the new media through promotion that is: dynamic, carefully
targeted, highly relevant and helps build an ongoing relationship based on the
permission and trust of the customer. 103
Online executions of different communications tools 104
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People
▰ Anyone who comes into contact with your customers will make an
impression, and that can have a profound effect — positive or
negative— on customer satisfaction.
▰ The reputation of your brand rests in your people’s hands. They
must, therefore, be appropriately trained, well motivated and have
the right attitude.
▰ Happy Staff = Happy Customers = Happy Shareholders
▰ Many customers cannot separate the product or service from the
staff member who provides it. In fact, service – before, during and
after a sale – is required if repeat business is to be enjoyed. This
shows the importance of your people 105
Process
▰ Process is the methods and procedures companies use to achieve all of the
marketing functions.
▰ The process of giving a service, and the behaviour of those who deliver are crucial
to customer satisfaction. Issues such as waiting times, the information given to
customers and the helpfulness of staff are all vital to keep customers happy.
▰ Process is one of the 'P's that is frequently overlooked.
▰ A customer trying to reach your company by phone is a vital source of income
and returning value; but so often customers have to stay on hold for several
minutes listening to a recorded message before they are able to get through.
Many of these customers will give up, go elsewhere and tell their friends not to
use your company – just because of the poor process that is in place. Even if they
do get through, they will go away with a negative impression of the company. The
reason for this is that the systems are not usually designed by marketers- they are
designed for the company's benefit, not the customer's. As a consequence, this
'P' could be a great source of competitive advantage if used wisely. 106
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Physical evidence
▰ The tangible expression of a product or service and how it is purchased and used.
▰ A service can’t be experienced before it is delivered. This means that choosing to
use a service can be perceived as a risky business because you are buying
something intangible. This uncertainty can be reduced by helping potential
customers to ‘see’ what they are buying.
▰ Case studies and testimonials can provide evidence that an organisation keeps its
promises. Facilities such as a clean, tidy and well-decorated reception area can
also help to reassure. If your premises aren’t up to scratch, why would the
customer think your service is?
▰ Each of the ‘ingredients’ of the marketing mix is a key to success. No one
element can be considered in isolation — you cannot, for example, develop a
product without considering a price, or how it will reach the customer. This
process is called marketing planning. 107
What is Internet Marketing?
▰ Digital Marketing
Digital marketing is a broad term that describes a set of marketing processes that utilize
all available digital channels to promote a product or service or build a digital brand.
▰ Channels of digital marketing include: Web sites, Social media platforms, Banner
placement, email marketing, mobile marketing, SEO, pay per click campaigns, Web TV,
SMS, billboards and anything else with a digital foundation.
▰ Internet Marketing
Internet marketing refers to marketing using channels that require a real time live internet
connection. Internet marketing is a subset of digital marketing. It is in fact the most
important component since the majority of digital marketing activities fall within the
boundaries of Internet marketing.
▰ Channels of internet marketing: SEO, SEM, paid search advertisements, e-mails, website
content and so on, are. milanvachhani.blogspot.com
108
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Channels of Internet marketing
Search Engine Optimization (SEO)

▰ This is basically the foundation of Internet marketing which helps in the ranking of
an online business or a website higher in any user searches on the search engines.
It comprises of two main components: On page SEO and Off page SEO.
Social Media Marketing (SMM)
▰ Social media has taken the entire world by storm these days. Even within the
marketing sphere, social media is thus extensively used to increase traffic on a
website or online business. The various social media channels include Facebook,
Twitter, Instagram, Pinterest, LinkedIn, YouTube, Google+, etc.
109
Pay Per Click (PPC)

▰ This is yet another important component of Internet marketing which helps in
getting more traffic by placing ads on search engines or a third party website.
Google AdSense is one of the great tools for PPC, and there are many others as
well.
Content marketing
▰ Content marketing has also gained more popularity these days. A good content
always helps in attracting the right target customers
Email Marketing
▰ In this strategy, a newsletter or an offer is sent in the form of an email to the
target audience by acquiring their email addresses. And thus the outreach is
widened by just sending a single bulk email to promote the brand or its products
and services. milanvachhani.blogspot.com
110
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Mobile Marketing
▰ More and more users use their mobile phones to search the web, engage on
social media, or find products or services to buy. In fact it is estimated that 30%
of the traffic coming to a website is from mobile.
▰ Mobile marketing is about creating content or ads that is viewable and suitable
for a mobile device.
Banner Advertising
▰ You can find banners in almost all web properties i.e. websites, mobile websites,
mobile apps, search engines, newsletters, Facebook, Twitter, YouTube etc. Digital
marketers try to promote their products or services through different types of
banners (static, text, animated, images, videos, clever banners) in different
platforms.
111
Opportunities in Internet Marketing
▰ Convenience
▰ Reach
▰ Relationships
▰ Empowering Effect
▰ Elimination of geographic barriers
▰ 24 hours/seven day availaibility
▰ Cost-Effectivity
▰ Trackability
▰ Personalization
112
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Empowering effect
▰ One of advantages of online marketing is related with its enabling
effect especially on small businesses since “internet can extent
market reach and operational efficiency of small and medium
interprises (SMEs)”
▰ It should be, therefore, stressed that "internet has created
unprecedented opportunities for small businesses to engage in
national and international marketing campaigns which could have
been unaffordable due to the huge amount of resources required"
▰ Email marketing, blogging, launching web-sites, etc are among
easily affordable inter-fostered channels than can provide small
business with the ability to survive and compete. milanvachhani.blogspot.com
113
Elimination of geographic barriers

▰ One of the key advantages of online marketing is that it removes all
geographical limitation from the practice of buying and selling.
▰ So internet allows an unlimited global reach at on outstandingly
lower cost. Due to massive cost of traditional media, global reach
was once the exclusionary realm of huge multinational corporation,
but the advent of cost-effective internet technologies has enabled
smaller businesses to enjoy this kind of reach.
▰ Overcoming the geographic barriers, marketers are now able to
present products and services to different groups of costumers
across the universe with the simple condition that they have access
to internet. 114
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24 hours / 7 days availability

▰ Internet now can provide customers with timely information due to its
availability 24 hours a day, 7 days a week. So, due to the establishment of online
shops, customers are now able to acquire information and shop online any time
of day or night they wish and prefer. So there remain no time limitations in this
regard because online businesses have no special closing and opening times.
▰ People may visit physical markets after searching internet or the other way
round they can surf internet for competitive prices after visiting physical stores.
▰ Besides that there is no doubt that online purchase is more convenient since
there is no need to go out of home, visiting different stores and take the burden
of comparing different products and prices. The buyers can do their shopping
much more effectively from the comfort of their homes. Needless to say a lot of
time and energy is saved this way. milanvachhani.blogspot.com
115
Cost-effectivity
▰ It goes without saying that, compared with traditional advertising
media channels, which are very resource consuming, online marketing
via internet is clearly cost-effective and can accomplished its
objectives at a fraction of the cost.
▰ For instance it is obvious that the cost of launching an ad online is far
less than placing an ad in a magazine or on a billboard.
▰ The cost of establishing one's virtual presence, networking with other
institutions and communication with consumers is significantly low.
▰ Internet marketing enables the companies to save their resources, an
aspect which is highly appreciated by companies since the online
marketing campaigns don‘t require massive investment. milanvachhani.blogspot.com
116
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Trackability
▰ Another aspect of the online marketing is its possibility of tracking.
▰ Internet enables measurement of everything taking place on it. So,
the number of clicks that a particular promotional piece receives
and amount of website traffic is easily measured.
▰ In this way the marketer is enabled to track the visitors of website
and understand their behavior. Internet also allows the companies
to find out whether their campaigns are working or not, what kind of
customers are interested in their products, from where?
▰ Track the number of users who view each page, location of
previously visited pages, date of view, time of view, duration of
viewing, links followed, and so on“. milanvachhani.blogspot.com
117
Personalization
▰ Online marketing is a personalized marketing which is also called
marketing to the Segment of One or "one-to-one marketing".
▰ Personalization refers to provide products and services to
customers' preferences based on their online, registered purchase
history.
▰ In this way customers are send personalized messages which
produces much greater impact compared with impersonalized,
generic messages send indiscriminately to mailbox of customers.
118
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Challenges in Internet Marketing
▰ Problem of Integrity
▰ Lack of face-to-face contact
▰ Security and Privacy
▰ Lack of trust
119
Problem of integrity
▰ Integrated marketing has been a central theme of the profession.
▰ On the other hand one of major problems with marketing campaigns is that they
employ several offline and online promotions channels such as press, brochure,
catalogue, TV, cell phone, e-mail, internet, social media etc, while lack a
comprehensive, harmonizing marketing framework. Each item is used in isolation
and accomplished as a different task not as a component of an integrated
campaign aimed at realization of specified and particular objectives.
▰ The website will never be visited if there are no links to it, viral marketing requires
email or social media websites to communicate the message and search engines
are useless without websites to link to it.
▰ So it is that in any internet marketing strategy all components must merge
together. milanvachhani.blogspot.com
120
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Lack of face-to-face contact

▰ Internet transactions involve no embodied, personal interaction and that is
why some customers consider electronic modes of providing customer
service impersonal and enjoy the experience of shopping in a bricks and
mortar, physical store.
▰ They prefer to talk to store personnel in a face to face manner, touch the
related product with their hands, and socialize with other customers.
Virtual market place can not provide for this function of offline shopping
and lacks personal interaction.
▰ "for the types of products that rely heavily on building personal
relationship between buyers and sellers such as the selling of life
insurance, and the type of products that requires physical examination,
Internet marketing maybe less appropriate" milanvachhani.blogspot.com
121
Security and Privacy

▰ Information privacy is among major topics to be taken into consideration in
today‘s evolving electronic world. It is clear enough that nowadays customers'
data can easily be shared with other companies without asking for their
permission.
▰ Moreover their more crucial personal data such as usernames and passwords are
not immune from hackers. Another related problem is spam and pop-up adds
which considered by majority of online customers an instance of intrusion of
privacy.
▰ These security and privacy issues are among challenges in the way of online
marketing.
▰ Effective internet marketing, therefore, depends on resolving the related problems
in this regard. milanvachhani.blogspot.com
▰ The major dimension with respect to privacy is the choice or consent. 122
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Lack of trust
▰ Online trust includes consumer perceptions of how the site would
deliver on expectations, how believable the site's information is, and
how much confidence the site commands.
▰ Today despite the rapid growth of online transactions several
peoples till mistrust electronic methods of paying and still have
doubt whether the purchased items will be delivered or not.
▰ On the other hand prevalence of online fraught has made customers
hold negative or doubtful attitudes towards online transactions.
123
Digital marketing framework
▰ Many organizations now find themselves with sprawling, disjointed

digital marketing operations that lack a central vision and useful
measurement systems. Marketing and sales executives find
themselves struggling to devise, measure and monitor and optimize
the performance of these scattered interactive programs on a multi-
pronged approach to manage digital strategy engagements.
▰ The right approach to establishing a firm, coherent, structured
digital marketing framework is to first understand the organization,
do a comprehensive competitive analysis, go for an existing audit
and review of online properties and then suitably recommend to
improve the optimize the existing. 124
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▰ The Marketing Framework is process that marketers can use to

Analyse, Plan, Implement and Manage their marketing
communications strategy
▰ It is specifically designed to help marketers plan and implement the
“marketing communications” elements of their marketing plan
across the Paid, Owned, Earned and Technical channels (POET) at
all stages of the sales funnel. What’s more it can be used for both
online and offline marketing channels.
▰ Digital Marketing Framework can be used by companies of all sizes
and types suitable for marketers, business managers and students.
125
▰ A 4-Step Digital Marketing Framework milanvachhani.blogspot.com

126
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Phase 1: Define
▰ To apply this framework to your business, start off by defining your
audience, business goals and buying triggers. This is crucial to
ensure you kick off on good ground.
▰ In the first phase (Define), you’re basically looking out for these 3
things:
▻ Who’s going to buy from you? (Audience Definitions)
▻ What will make them buy from you and when? (Micro-
moments/Buying triggers)
▻ What do you want them to do in order to buy from you? (Macro
& Micro Conversions/KPIs/Goals) 127
Phase 2: Implement
▰ Based on what you’ve defined in the first phase, you then implement the
most appropriate digital marketing strategies through various channels to
create awareness, engage, procure, and retain customers.
▰ Based on the variables, scenarios, and conditions you have defined, you can
then deploy a digital marketing campaign and target the most appropriate
digital marketing channels to engage with your target audience on as many
relevant touch points as possible.
▻ Implement SEO & SEM
▻ Implement Display Advertising with Facebook Ads
▻ Implement Content Marketing via Guest Blogging
▻ Implement Social Media Marketing
▻ Implement User Experience Web Design and Conversion Rate milanvachhani.blogspot.com
Optimisation 128
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Phase 3: Analyse
▰ Once you’ve ran your campaigns, you need to collect and analyse data (e.g. which
channels generate more ROI, which audiences are more likely to purchase) in order to
further optimise and boost your ROI.
▰ What to Analyse?
▰ There are a ton of metrics you can measure and analyse – From audience
demographics, acquisition channels, average time spent on landing pages, bounce
rates, top conversion paths, to dozens of goals and smart goals in each digital
marketing campaign. What you need to analyse depends on the objectives you’ve set
and the type of digital marketing campaign you’re running. You can
▻ audit and benchmark your website, social profiles
▻ determine if your website performs technically (e.g. from an SEO and usability
perspective) and whether it is fit for your business purpose
▻ analyse and benchmark your current marketing channels and activities (i.e.
presence, activity and performance) as compared to your competitors
▻ use the results of your Analysis to correct any immediate issues or problems 129
Phase 4: Optimise
▰ This is the crucial phase, where you make minor to major changes
(e.g. from lowering your ad spend on a digital marketing channel to
targeting different audience segments) based on your digital
analytics data.
▰ Let’s leave testing and optimising button clicks, ad creatives, and
landing pages to the respective digital marketing disciplines i.e. UX
Web Design and Conversion Rate Optimisation.
▰ Let’s focus on these two metrics and optimise your campaigns
from a top-level digital marketing point of view:
▻ Audience Targeting
▻ Marketing Spend on Digital Marketing Channels 130
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131
132
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References:
▰ https://www.equinetacademy.com/digital-marketing-strategy/
▰ https://anicca.co.uk/blog/introducing-aniccas-a10-digital-
marketing-framework-to-develop-your-digital-marketing-strategy/
133
Impact of digital channels on IMC
▰ Integrated Marketing Communications is a simple concept. It

ensures that all forms of communications and messages are
carefully linked together.
▰ Integrated Marketing Communications (IMC) integrates all the
promotional tools, so that they work together in harmony.
▰ Promotion is one of the Ps in the marketing mix. Promotions has its
own mix of communications tools.
▰ All of these communications tools work better if they work together
in harmony rather than in isolation. Their sum is greater than their
parts – providing they speak consistently with one voice milanvachhani.blogspot.com
all the time,
every time. 134
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▰ IMC disciplines are online advertising, online relationship marketing,

online interactive communication, online public relations (PR) and
mobile communications.
▰ IMC saves money as it eliminates duplication in areas such as
graphics and photography since they can be shared and used in say,
advertising, exhibitions and sales literature. Agency fees are
reduced by using a single agency for all communications and even if
there are several agencies, time is saved when meetings bring all
the agencies together – for briefings, creative sessions, tactical or
strategic planning. This reduces workload and subsequent stress
levels – one of the many benefits of IMC.
135
▰ Different channels have different strengths and weaknesses, and different types
of content suit different channels better - Twiter is good for short, witty and pithy
messages, while Pinterest is great for content related to design, and aspirational
content works best on Instagram.
▰ So why not play to each individual channels strengths and design marketing for
that channel specifically, rather than attempting to integrate all channels?
▰ To make an impact you have to coordinate messaging. Have you ever wondered
why McDonalds are constantly advertising? Everyone knows who McDonalds are.
Everyone knows what McDonalds offer and there is one on every street corner. So
why do they advertise? Because there is power in reminding consumers about
your brand, even if they already know that it exists. And of course, they may want
to change perception of it's values and what it offers. This is why consistent
messaging across channels is so critical. Without it, your message will fail to
make an impact and you will just be yelling into a gale. milanvachhani.blogspot.com
136
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▰ Really good integrated marketing is about more than just having the
same slogan, ident and brand colours splashed across every
marketing channel. It weaves a coherent story through everything
the brand does. One of the best examples of this is Compare the
Market's classic 'Compare the Meerkat' campaign, which has been
running for over 8 years. It integrates social media, search, TV and
more, while using real Meerkat dolls as gifts to keep compare the
market's brand awareness high.
▰ By using the same set of characters across all mediums, compare
the market have successfully integrated all their marketing channels
and managed to create one of the most memorable and long-lasting
ad campaigns of all time. milanvachhani.blogspot.com
137
▰ Another great example of an integrated marketing campaign is

Coke's 'share a coke with' campaign, which used unified messaging
across TV, Social, Outdoor and Display leading to a 7% uplift in Coke
consumption by the target demographic, making it one of the most
successful Coke campaigns in history.
138
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THANKS!
Dr. Milan Vachhani
9898626213
Associate Professor,
milan.vachhani@gmail.com
Sunshine Group of Institions,
Rajkot
139
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11-09-2019

TYPES OF DISPLAY ADS

▰ Display ads can be classified into different types based on two

Rich Media Ads

Medium rectangle ad Large rectangle

Leaderboard Half page

Large Format Ads

Cost per click (CPC)

CPC versus CPM

Cost per Lead (CPL)

PROGRAMMATIC DIGITAL ADVERTISING

▰ Programmatic advertising is automated ad buying.

▰ Programmatic buying signifies the shift from contextual targeting to

▰ Programmatic buying reaches the

Process of Programmatic Advertising

Players in Programmatic Advertising Ecosystem

▰ It integrates multiple networks together.

▰ Second party data is customer

▰ Open exchanges allow buyers to purchase media on an audience

7. Real Time Bidding

▰ There are some challenges plaguing the display advertising industry.

▰ It should be noted that 50% of ad pixels should be displayed for a

Display ads Overlay Ad

Non Skippable Video Ads

Cost per Milli (CPM)

Cost per Day (CPD)

Desktop universal video masthead

5. Targeting and Optimisation

WHY PAY FOR SEARCH ADVERTISING?

▰ Few reasons why companies should consider paid search

▰ An account can be charged on a prepaid model where the advertisers transfer

▰ For example, when Flipkart ran the campaign-Big Billion Day-during

▰ Search engines show

▰ AdRank is the position at which the ad appears in the search engine

1. Basic Ad Auction Model

2. The Ad Auction Model

AdRank = Maximum bid x Quality Score

▰ Although Google does not provide weights of

Setting the Right Bids

ii) Expected Click Through Rate

3. Why is AdRank Important?

2) Competition for Attention Theory

CREATING THE AD CAMPAIGN

▰ To better understand the following sections, we will take the case of

Architecture of search Advertising Account

AdWords account structure is

1. Google AdWords Account

▰ An important setting is bidding model where the advertiser can

Best Practices for Creating Effective Ads

▰ Advertisers must generate performance reports for campaigns, ad

Digital Marketing Mix

▰ The 7Ps which are

What is Internet Marketing?

Channels of Internet marketing

Search Engine Optimization (SEO)

Pay Per Click (PPC)

Opportunities in Internet Marketing

Elimination of geographic barriers

24 hours / 7 days availability

Challenges in Internet Marketing

Lack of face-to-face contact

Security and Privacy

Digital marketing framework

▰ Many organizations now find themselves with sprawling, disjointed