1. 1 Ravi Vatrapu vatrapu@cbs.dk Thursday, 15-July-2010 Kilen 2.75, CBS, Frederiksberg, Denmark DØK HU2D - Internet Marketing: Lecture 15 Course Webpage: http://www.itu.dk/people/rkva/2010-Summer-IM/http://www.itu.dk/people/rkva/2010-Summer-IM/ Facebook Group: http://www.facebook.com/group.php?gid=133258548012http://www.facebook.com/group.php?gid=133258548012 Etherpad: http://ietherpad.com/d5mBZdMDe6http://ietherpad.com/d5mBZdMDe6 Sponsored Search: History and Terminology Fain, D., & Pedersen, J. (2006) Sponsored search: A brief history. Sponsored search: A brief history. Bulletin of the American Society for Information Science and Technology, 32(2), 12-13.

2. Elements of Sponsored Search 2 1.Advertiser-provided content 2. Advertiser-provided bids 3. Review process to ensure relevance 4.Dynamic matching of ad contents & search queries 5.Displaying ads in some rank order 6.Metrics and Billing

3. Brief History of Adoption 3  “In 1998, GoTo, later Overture Services, was the first to combine these elements. (Yahoo! acquired Overture in 2003, re- branding it to Yahoo! Search Marketing in 2005)  BeFirst – now MIVA – followed with a similar product in 1999  Google adopted the model and modified it to incorporate click feedback in 2002  In 2005, Ask.com adopted it, and MSN Search extended it to support behavioral targeting”

4. Original Motivation 4  html tags used to indicate keywords  Irrelevant websites included in the search results due to keyword tampering  Hand-crafted results page for top 1000 queries by GoTo  Sponsored search: listing associated with a keyword

5. Early Internet Advertising 5  Banner Ads  Paid Search Ads  Placement Search Ads

6. Measurement and Pricing 6  Advertisers: Measuring Effectiveness  Publishers: Setting Prices  CPM: Cost Per Mille  CPC: Cost Per Click (1996 Yahoo with P&G, LinkStar introduced CPC to Search Advertising)  CPA: Cost Per Action  eCPC  Conversion Rate= CPA/CPC  Click Through Rate= CPC/1000*CPM

7. Terminology 7  “ Search engine optimization (SEO) is the process of improving the volume or quality of traffic to a web site from search engines via "natural" or un-paid ("organic" or "algorithmic") search resultsweb sitesearch enginessearch results  as opposed to search engine marketing (SEM) which deals with paid inclusion.” (Wikipedia)search engine marketingWikipedia  SERP: Search Engine Results Page  Paid Inclusion: Sponsored query results rank ordered

8. Terminology ad impression: Each time someone views an advertisement online. ad networks: A company that sells ad inventory in aggregated packages to advertisers. One example of an ad network for blogs is called BlogAds.BlogAds banner ad: Graphical advertisement on a web page that allows people to click through to a special advertiser's site. behavorial ads: Advertising that's served up according to a person's recent online web surfing, matching their interest even if they are not currently on a relevant site. clickthrough rates (CTR): The percentage of times that a person seeing an ad online clicks on the ad. cost per action (CPA): A type of ad in which the advertiser only pays the publisher for each time someone completes a transaction, whether that's registering for a site or buying a product. cost per thousand (CPM): The rate it costs for the ad to reach a certain number of viewers online. So a site with a $10 CPM would charge $100 for every 10,000 viewers reached. pay-per-click (PPC): An ad in which the advertiser only pays for each click made by viewers, with the price set by bidding against other advertisers online. opt-in marketing: Ads or commercial emails sent with the prior approval of recipients. http://www.pbs.org/mediashift/2007/06/your-guide-to-online-advertising178.html 8

9. Discussion 9