An Introduction to Online

Background

Marketplace

COSTS and TRADING

Types

 

UK online market To help you understand the online advertising world, we need to simplifying the infinite
The online advertising industry is enormous, and represents over 25% of all advertiser spend in the UK – and is now even bigger than TV. The market has developed rapidly in the last 15 years and the way online advertising is planned, bought and measured has changed too.

Online advertising is traded in the UK through 3 key types:
Display – roughly 20%
Pay per click (PPC) / classifieds – roughly 20%
Paid for Search (SEO) – roughly 60%

In addition, the last 5 years have seen huge growth in advertising on social media sites such as Facebook and Twitter.

Display Advertising positions advertisers around content online. As the content and the delivery of online content improve, and the information available on the consumers is more detailed, so do the opportunities with display. Behavioural targeting allows brands to target consumers based on their web-browsing behaviour such as the websites that they have visited or the search terms they have used. There are many different targeted parameters available, please contact us for more details.

PPC (Pay Per Click) & Search (SEO) allows advertisers to target consumers looking for services or products that the advertisers supply online, through the terms that the consumer puts into the search engine. Advertisers only pay if their advert is clicked on, making this a very cost effective method of generating traffic and sales.

Social Media provides an opportunity for brands to enter their customers' lives and is a trust that should not be abused. At Recipe we develop long term communication strategies based on primary research. These strategies are specifically tailored to your audience values and interests to ensure that the valuable lines of communication between brand and consumer are respected, and mutually beneficial.

The flexibility of formats and the targeting afforded to advertisers by online advertising, make it a powerful tool for brands of all sizes. From direct response to broadcast branding, the opportunities that exist online allow for almost any advertising objective to be achieved.

We buy online advertising for our clients across 4 main categories:

  • Socialising and sharing - sites such as Tumblr, Instagram, facebook, Twitter, MSN, Pinterest and Wordpress are all examples of destination locations where users share, interact and communicate
  • Shopping - sites such as Amazon, Ebay, Tesco, Next and Argos allow users the ability to purchase goods and services online. Online commerce (e-commerce) is now a huge growth area in the UK in terms of spends
  • Learn and Lead - Sites such as Wikipedia, Trip Advisor, Money Saving Expert and eHow allow users to seek out information and learn. Many of these sites contain feedback forums and user generated information / reviews which can be shared with others
  • Entertainment - Sites such as YouTube, ITV.com, C4OD, YouView, SeeSaw, iPlayer, Buzzfeed and Netflix provide numerous sources of amusement and fun for visitors

The way we plan and buy online advertising is based upon a much more detailed classification system within the 4 main categories above, and allows us to deliver highly targeted and cost effective campaigns for our clients.

Cost-per-Mille (CPM) = 1,000 views

  • Bought on a minimum number of views to be delivered
  • CPM is still the most common trading metric in the UK
  • CPM trading is used to maximise the number of people that see your online campaign

Cost-per-Click (CPC)

  • Bought on a minimum number of clicks (people clicking into your display advert)
  • To be successful, creative adverts and engaging formats are required
  • This model fails if your display advert is flat and gives the user no reason to click on it

Cost-per-View (CPV)

  • Guaranteed views of your video content (e.g. on YouTube)

With the market being so large and in relative infancy – a number of alternative trading models also exist such as:

Cost-per-Acquisition (CPA)

  • Advertiser pays a fixed price for each acquisition or desired action

Cost-per-Engagement / Cost-per-Interaction (CPE/CPI)

  • The advertiser pays when a user ‘engages’ with their campaign
  • Examples of engagement are Facebook Likes, shares and poll responses

Cost-per-Unique User (CPU)

  • The total cost of the online campaign divided by the number of unique visitors



In addition to these example trading models, online advertising allows fantastic opportunities for clients to innovate and deliver high impact campaigns. A good example of this is the Home Page TakeOver (HPTO).

HPTOs are a great way of reaching millions of people in a short period of time, however as with all advertising – this comes at a cost.

An MSN HPTO will cost around £85k

HPTOs are often the kick-off for larger sponsorship campaigns or associations, but they can deliver mass reach in one day, using impactful and creative formats with guaranteed clicks from the host site to the advertisers. HPTOs do not have to be bought on large domains or sites – smaller niche sites will offer them, and the price decreases with the size of the site.

Once a trading model is agreed – how is the airtime planned and bought?

Base CPMs for online advertising vary greatly depending on how selective you are about the sites you advertise on. Below are the 4 broad ways of buying online inventory are:

Blind network buys

  • Reach a broad audience
  • Lowest average cost at £1 per 1000 views

Targeted network buys

  • More targeted than blind buys, with buyers agreeing details for regions and categories to advertise around
  • Average cost at £3 per 1000 views

Behavioural targeting

  • Much more targeted, isolating users and sites to buy advertising on,
  • Optimised activity maximises the return on investment based on the click through rates of each site used – the buyer is able to control and amend this
  • Average cost at £13 per 1000 views

Site display

  • Advertising on one specific site, or a designated selection of sites
  • Average cost at £22 per 1000 views



Costs also vary by buying formats, the amount your online campaign will cost is also dependent upon the sort of creative you use. For example, a fixed banner will cost less to place on a site that a flash banner which displays interactive animations.

As online advertising is so innovative, there are many different sorts of formats that can be bought, but some of the main / standard ones are listed here:

Banner - A horizontal, online advert usually found running across the top of a page in a fixed placement

Button - A square online advert usually found embedded within a website page

Skyscraper - A long, vertical, online advert usually found running down the side of a page in a fixed placement

Expandable banner / skyscraper – fixed online advertising placements that expand over the page in the response to user action eg: mouseover

To make your campaign as effective as possible, Recipe need to understand exactly what you need the campaign to achieve - and we can then tailor a package for you.

However, broadly speaking we can categorise the desired results of a campaign along a scale from broad branding to highly targeted direct response.

Important factors for a branding campaign:

Impressions Reach – how many people see the advert & Frequency – how many times is the advert seen

Brand exposure duration (BXD)

Interactivity

Clicks

Click through rates

The following factors then get progressively more important for a direct response campaign:

Click through rates

View conversations

Click conversations

Revenue

Cross sales

Life time value

If you’d like us to plan a campaign for your business – please contacts us

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