Internet Advertising © 2001 Ann Schlosser, University of Washington Business School

Agenda Permission marketing Yesmail.com Banner advertising Optimization

To Opt-In or Opt-Out Opt-in –Send messages only to those who request them –Default = not included in list –Result: smaller lists (48.2% participate) –Favored by consumers –Risk missing new opportunities –Policy employed by EU Opt-out –Send messages to people unless they request NOT to get messages –Default = included in list –Result: larger lists (96.3% participate) –Favored by firms –Introduce to US Congress as baseline privacy law “When I get a spam that only says ‘Click here to opt out,’ that really annoys me. That’s not permissions marketing.” – Seth Godin, author of Permission Marketing.

Dear cadrys, Several times a month, eBay sends out valuable communications with news, offers and special events that help you buy and sell. Unfortunately, we have noticed that an error occurred during your registration process that prevented you from receiving these communications. Many of your Notification Preference defaults were set to "no" rather than to "yes", which means that unlike other eBay members, you're not receiving these types of communications. We'd like to resolve this problem quickly and efficiently. Therefore, on 1/8/01, we returned all your Notification Preferences to the standard default of "yes" to put you in line with the rest of the eBay community. However, we want you to choose your Notification Preferences rather than rely on our standard defaults and will therefore not include you in any communications until 1/23/01. This will provide you with some time to evaluate these choices and modify your Notification Preferences. You will, however, continue to receive certain administrative s that are part of executing your eBay transactions. eBay : Where "Opt-out" Means "Keep Trying" Posted at

Familiarity with Marketing Models RetentionAcquisition

Member Registration

Customization and Testing

Business Process Rules

Proprietary Network, Partner Network or Hybrid? Individual consumers Partner websites Clients ?? Arguments based on: Economics Branding Data quality

Arguments for Proprietary Network Economics Average case: Preferred to partner network if R > $6MM per month With 2 messages/week (each generating 25cents), need over 3 million members Optimistic case: Preferred to partner network if R > $4.16MM per month With 8 messages/week (each generating 25cents), need over 520,000 members Branding If defend consumers against marketing abuse, then serve consumers Data quality Those registering at yesmail.com likely willing to provide rich data and are receptive to promotional s Individual consumers Clients

Arguments for Partner Network Economics Proprietary network: If spend $3MM on banner ads (CPM = $30 and CTR of 1%), grow by 1 million members per month Partner network: With 80 partners, each with 25,000 new registrations per month with 50% opt-in, get 1 million members per month Branding Associate with well-liked brand Avoid mass advertising to drive traffic to yesmail.com Data quality Quality data if users are involved in partners’ sites/brands Where register is additional important data Individual consumers Clients Partner sites

Member and Client Benefits Members –Valuable promotions –Really avoiding spam? Clients –eTrack –Flat rate of 25 cents per

Attitudes toward Permission vs. Unsolicited

Future of Agents such as Yesmail? Potential pitfalls: –Trust –Demand –Feasibility

Yesmail Update Summer 2000: commit to using double opt-in to avoid appearing on Maps’ (Mail abuse prevention system LLC) list of spammers DateMembership size Average monthly growth Partner Network size May million665, Feb million1 millionNA

Rich Media Ad Sent to 100,000 prospects using yesmail.com list 165,000 responses

Conversion Costs Across Medium

Death of Banner Ads? Paid vs. In-House Ads

Banner Ads Full CRM = $28.28 Vertical banner CRM = $54.17 Half CRM =$26.51 Micro CRM = $16.94 New: Skyscraper

Greatest Difficulties in Adopting Online Advertising Average of responses on 5-point scale where 1 = least problematic and 5 = most problematic

Ad Strategy Across Industries Branding Behavior- based

Banner Ads Enhance Awareness and Image

B2B Advertising Share of advertising impressions = 7% Number of B2B advertisers making up 50% of online advertising = 18

Concentration of B2B Advertising and Work Users

Reaching Target Audience

Online Media Reveals Three Action Profiles Qualified prospects Traditional advertising targets a qualified audience Online advertising targets ready and motivated consumers All consumers Ready Motivated Qualified prospects

Different Media Approaches for Different Profiles

Optimization

Sample Report from Ad Server Avenue A