Real-Time Bidding: New era of Digital Advertising

New technologies have introduced a variety of challenges to advertising companies. RTB, or real-time bidding, addresses many of these challenges by providing a direct and flexible method of matching consumers to appropriate advertising content. It offers several key benefits to the buy and sell sides.

Real-time bidding (RTB) will be a significant factor in fulfilling the promise of online digital advertising, which has been on the limit of dramatic changes for many years.

RTB, as defined by Parks Associates, describes the automated process of buying and selling online display advertising in real time, and it incorporates enhanced solutions in targeting algorithms and data analytics in order to deliver better targeting, greater control and more granular campaigns.

Given these strong benefits to ad buyers and sellers, RTB is starting to claim more revenues in the online advertising industry, and by 2017, it will account for 34 percent of all online display ad revenues.

Challenges in Online Advertising

Several industry factors will drive this shift to RTB. New technologies have introduced a variety of challenges to advertising companies. Consumers can skip commercials or go completely "over-the-top" in their video viewing, and they are now using multiple screens to consume content. Parks Associates consumer research reports over one-half of U.S. broadband households have a smartphone and nearly one-third have a tablet. All these extra screens make it more difficult to follow consumers and necessitate detailed tracking solutions.

These types of tracking solutions raise privacy concerns, often cited by advocacy groups, which could lead to customer rejection of the online advertising industry as a whole. However, Parks Associates' report Advertising Strategies on Connected TVs finds 45 percent of U.S. consumers are comfortable with targeted ads based on their TV-viewing habits. Over one-third are comfortable with targeted ads based on their online browsing habits, according to the report Monetization of Multiscreen Video: Content Owner Strategies.

While there are and always will be some consumer segments unwilling to share any details of their buying and browsing habits, many consumers are willing to provide personal details in exchange for something of value.

The more significant challenge has been in matching consumers with the appropriate content and, in some cases, matching consumers with any content. For the past 10 years, companies looking to buy and place online ads on a large scale typically have purchased blocks of ads, usually in groups of 1,000, through ad networks. Agencies pay these ad networks a CPM-based rate to reach audience segments with the understanding that a portion of the online ads will not reach intended consumer targets. The industry considers ad networks as "blind-buys": Buyers do not have full control over ad placement; so as a result, ads can appear on any website located in the network.

RTB addresses many of these challenges by providing a direct and flexible method of matching consumers to appropriate advertising content.

How Does RTB Work?

RTB is a data-driven buying model through which ad agencies place auction-based bids for individual ad impressions. This process takes place in milliseconds, allowing agencies to adjust their strategies almost immediately based on the performance of individual sites and ad impressions.

When a user visits a website, in addition to serving up HTML code, the Web server delivers an ad tag to an ad server, which ultimately sends the user's cookie ID to an SSP (supply-side platform) or ad exchange to be auctioned using RTB APIs. Buyers use that ID data to value the ad impression and set their bids. In an RTB environment, ad buyers analyze multiple variables of an ad impression, such as demographics, geography, and publisher attributes. The ad exchange determines the winner, and then the information flow goes back to the ad server to deliver the ad to the user's browser. This entire process is done automatically, in real time.

Below are a few examples to illustrate the meaning of RTB and its benefits beyond the standard targeting parameters (Geo Target, Gender, Age, Category, Demographic, etc.). Let’s say we want to set a maximum bid price for display ads in a campaign (bid = $1 DCPM). We can set the system to change the bids according to a set of rules, and all in real time (50 milliseconds before the ad loads)!

For example:

• If your ad appears below the fold - bid 0.25c
• If the user is seeing the ad for the first time – bid $1
• If the user saw the ad 3 times this week – bid $0.5
• If the user saw the ad 5 times this week – bid $0.1
• If the user saw the ad 7 times this week – don’t bid
• If the user visited your site in the past (retargeted user) – bid $3
• If the user visited your site and left at the checkout – bid $5 (and show him an ad with a discount!)
• If the user usually visits sites similar to yours – bid $2

RTB offers several key benefits to the buy and sell sides.

Core Benefits of RTB

Ad Buyers - Ad Agencies	Ad Sellers - Online Publishers
Accurate audience targeting Campaign control and transparency Improved return-on-advertising spend (ROAS)	Greater yield optimization Higher value of inventory Incremental revenues for display ads sold outside of direct relationships with buyers

While there are several paths for agencies to take when employing RTB, most use a media buying desk (MBD) that relies on demand-side platform (DSP) technology to access and bid on RTB ad impressions. An MBD is a buy-side platform that consolidates the process of planning, buying, serving and reporting online media campaigns, typically leveraging the technology offered by DSPs. Agencies also compile proprietary audience intelligence profiles through their MBDs, which integrate with third-party DSPs. DSPs connect ad inventory to agencies and measure a campaign's efficacy against its goals.

Agencies know who they want to contact due to data management platforms (DMPs). DMPs provide audience intelligence across the entire digital ad ecosystem, not just the RTB ad market, containing info on variables such as purchase intentions, household demographics and behavioral patterns. DMPs collect, manage, and evaluate online user information obtained from multiple media sources to identify and create audience segments. They enable the delivery of the right ad unit to the right consumer on the most effective media channel.

The confluence of these elements boosts the overall value of the RTB process for all players, so much that on the supply side, publishers are beginning to release premium inventory to SSPs to capture larger shares of ad budgets processed in RTB markets.

Facebook and Ad Exchanges

In mid-2012, Facebook announced the expansion of its growing display ad business into the RTB marketplace, with several DSPs already testing the Facebook Exchange, or FBX. RTB-enabled ad exchanges aggregate ad impressions across many online channels and connect ad sellers to buyers. Primarily a sell-side service, ad exchanges provide ad inventory details, such as website type, ad unit size, and user geography to ad bidders (e.g., MBDs, DSPs, ad networks). They also manage the entire ad-auction process - receiving the bid, determining the winner and facilitating ad placement.

Within the FBX system, brand advertisers can target Facebook users based on their Web-browsing history, with ads displayed on a Facebook page based on third-party Web browsing habits. It matches users more closely with not just relevant content but with products where they have displayed purchase intention. For example, Facebook Exchange can serve up ads about cheap flights or local auto dealers to a user who has visited a travel site or the Ford home page.

FBX indicates Facebook is getting more aggressive in its advertising methods -- and is forging new ways to build revenues. According to comScore, the social network serves approximately one-third of U.S. display ad impressions, so the FBX could open up a large source of ad inventory to the RTB market.

Facebook is competing with other companies in the RTB market, notably Yahoo and Google, which have established their presence in the RTB market through a variety of acquisitions. Yahoo acquired Right Media in 2007, Rubicon Project purchased Fox Audience Network in 2010, and Google followed suit in 2011 with the acquisition of Admeld.

Growth of the RTB Market

Agency demand for cross-platform ad synergies will drive the development and adoption of RTB sell-side platforms for emerging media, particularly mobile, online video, and social media, but these markets will remain small, with growth contingent on the maturation of the online display RTB ad market. Even so, Parks Associates asserts this market will grow quickly. RTB is a complicated process, with unfamiliarity and a lack of industry knowledge as potential inhibitors, but even if they have any significant impact, they will serve only to slow growth, not stop it.

The advantages of the RTB process to ad buyers and sellers are simply too great to ignore. Ad spend will shift away from traditional online display advertising to the RTB ad market as buyers become more comfortable with the concept and realize benefits such as cost efficiencies, reduced ad waste, rapid scalability, and improved control and transparency. RTB revenues generated by online display ads in North America will reach US$1.6 billion in 2012 and $7 billion by 2017.

Source: ecommercetimes.com and adgorithms.com 

Real Time Bidding (RTB) Eco System - An Infographic

What is Real-Time Bidding (RTB)

Real-time bidding (RTB) is a relatively new advertising technology that allows online advertising to be purchased and served on the fly. Instead of reserving prepaid advertising space, advertisers bid on each ad impression as it is served. The impression goes to the highest bidder and their ad is served on the page. The closest analogy would be to the stock market: as stocks (online advertising spaces) come up for sale, brokers (advertisers) bid for the stock. Whoever bids the highest price gets that stock (the ad is served). Then the process immediately starts all over again.

How do advertisers decide when to bid on an ad? Real-time bidding (RTB) platforms buy data about users from across the web. The data is usually in the form of behavioral data gathered from tracking cookies. This information is then fed into the real-time bidding platform, giving advertisers insight into who is about to be served the ad.

Here’s a simplistic example of how real-time bidding (RTB) would work in  the real world: A user spends a lot of time on financial websites, checking stocks and looking up Morningstar ratings. They arrive on a webpage that uses Real-Time Bidding to serve ads. 

On the back end, a major financial services provider has specified that they are interested in users that like stocks. A luxury carmaker has also indicated interest in this audience. The RTB system matches these advertisers with the user profile and they bid on the ad.  Whoever has the highest bid wins, and their ad gets served.

Of course, all this happens in the blink of an eye. Advertisers don’t literally sit and bid on individual ads. Like Google AdWords, they set maximum bids and budgets. The user criteria can also be very complex, taking into account everything from very detailed behavioral profiles to conversion data.

The amount of ads sold through RTB is still relatively low percentage of the overall $26 billion US online advertising market. However, a recent study from Forrester predicted that RTB spending will increase 130% from 2010 to $823 million in 2011.

RTB technology is at the forefront of innovations in the advertising world. This platform is not only allows access to the majority of the world’s leading exchanges, networks and premium sites, it also contains superior targeting methods and advanced bidding options.

Source: crowdscience.com

How to investigate discrepancies – DoubleClick

The best practice is to always traffic DFA tags using the "DoubleClick tag" creative type. If you have trafficked, your DFA tags as a DoubleClick tag creative type and are experiencing a discrepancy of greater than 2%.

Normally, DFP records an impression as soon as the ad server determines which creative to send. When the DoubleClick tag creative type is chosen, however, DFP does not record the impression until the line item has been sent and an impression has been recorded by DFA. As a result, this process reduces discrepancies between DFP and DFA, typically to within 2%. The DoubleClick tag creative type will also eliminate the need to add click tracking macros.

If a DoubleClick tag is booked as a custom or third-party creative, this enhanced functionality is lost; DFP will treat the DoubleClick tag as a third-party tag. It will not report clicks without the DFP click macro, and you will see a larger discrepancy in delivery numbers (as you would with any third-party ad server). If you have trafficked DoubleClick tag as a custom or third-party creative type and are experiencing a reporting discrepancy between DFP and DoubleClick for Advertisers (DFA), please see the “Third-party discrepancies” article. Otherwise, explore the following possibilities.

Discrepancies may result from:

Invalid activity filtering: DFP and DFA differ slightly in filtration methodologies, which can result in discrepancies in instances when frequent invalid activities occur.

Things to check:

• Has the correct DoubleClick tag been trafficked? Like DFP, DFA has many tag types, including one that is specifically intended for use in DFP.
• Are you comparing the correct objects between DFA and DFP? Which DFA ads are included in the placement for the tag you’ve trafficked in DFP?
• Have you or the advertiser made any changes during the time in question (e.g., reassigning or modifying creatives)?
• Are you looking at daily data or aggregated results? Break out the data by day and line item.
• Does the advertiser code load properly? Perform live tests on web pages where the line item should deliver to verify that the correct ad tag calls are being made.

Source: Google Support

How to investigate discrepancies – Analytics

Analytics packages (such as Google Analytics) measure different metrics than ad servers, so their reports will not reconcile with DFP.

Page views vs. impressions

Analytics tracking is based on page views. In contrast, DFP ad server concepts are, by design, not page-specific:

• An ad tag can be placed on multiple pages.
• An ad unit can be associated with many pages.
• A line item can be targeted to multiple ad units.
• A line item can serve to a single page multiple times.

Code execution

DFP counts impressions delivered to ad tags; analytics packages count the execution of analytics tracking code. Since these snippets of code are located in different parts of your page code, both scripts might not load or execute on every page view.

For instance, some analytics packages recommend placing tracking code at the bottom of your HTML. If a user exits a page before the tracking code is executed, the analytics package will not count a page view, but DFP will still count an impression.

Since there is no interaction between ad tag code and analytics tracking code, analytics packages cannot account for unfilled impressions, which can be caused by any number of variables:

• A lack of inventory
• Firewalls and misconfigured security software
• Ad blockers
• Intermittent network connections
• General latency

Iframes

Some publishers serve DFP tags in iframes. Browsers that don't support the <iframe> tag will not report an impression, but an analytics package will count a page view. Ad tags within an iframe can result in an extra round trip between the browser and server. This additional latency can cause some users to leave the page before the browser has enough time to make the calls to both the analytics package and DFP. If the analytics tracking code is present within both an iframe as well as the parent frame, the analytics software will register an inflated number of page views.

Cookies

Analytics packages typically require cookies to track page views. Some packages only record visitor traffic associated with a visitor cookie. If this cookie information is not available for a hit, or if a user has disabled cookies, then that hit may be disregarded.

Referrers

Comparing referrer URLs to DFP clicks is not advised. Referrers in analytics are not an accurate measure of clicks or landings for the following reasons:

• Referrers can be disabled by users.
• Internet security applications can block referrer data.
• Firewalls and proxy servers can filter referrers.
• Users can spoof referrers to prevent servers from knowing where they've been.
• Depending on the line creative type (rich media, standard image, etc.) and the ad tag (iframe, JavaScript, standard HTML, etc.) on the page, the referrer can be either “DoubleClick” or your domain.
• Internet Explorer does not send referrer data when switching from either (a) HTTP to HTTPS, or (b) any non-HTTP/HTTPS protocol (e.g., file://) to HTTP/HTTPS.

Source: Google Support

How to investigate discrepancies – Third Party

Reporting discrepancies are common and expected when multiple systems are used to measure line item delivery. If you want to investigate a reporting discrepancy, use the resources below for assistance. It's best to investigate discrepancies while a line item is still running, since there are fewer troubleshooting steps available after a campaign has ended.

Third-party discrepancies

When an ad server delivers line items that are hosted by a third party, reporting discrepancies between the two systems will occur, and it is common to see campaign variances of up to 20%. Check the lists in "More about third-party discrepancies," below, to learn why discrepancies may occur and what you can do to prevent them.

Discrepancies may result from:

Latency: Lag between an initial line item request and the appearance of the creative can lead to differences in counts. For instance, a user will often navigate away after the browser receives the DFP line item request but before the third party responds with the requested line item, or a user may click on a link but navigate elsewhere before the landing page has loaded.

Network connection and server reliability: A third-party ad server may fail briefly or encounter an issue that prevents it from logging an impression.

Ad blockers: Ad blocking software can prevent the line item from being delivered by the third party after DFP has already counted an impression.

Low impression goals: A small numerical discrepancy can cause a high percentage discrepancy if the line item delivered few total impressions. For example, if you have a campaign delivering 100 impressions per day, a single-day discrepancy of 30 impressions will lead to a single-day discrepancy of 30% even though the actual number of missed impressions is low.

Tracking methodologies: DFP counts line items requests, but a third party may record an impression at a different time (e.g., when a tracking pixel is rendered).

Filtering: Ad servers have different methods for filtering impressions from spammers, bots, spiders, back-to-back clicks, link analyzers, and other automated or non-representative web traffic.

Things to check:

1. Are macros implemented properly?

2. If DFP recognizes the third-party ad server you are using, let it automatically insert the macros. If you are unsure of where to place macros, talk to your creative developer, advertiser, or third party for guidance.

3. %%CACHEBUSTER%% -- Make sure there's a random number properly inserted in each call.

4. %%CLICK_URL_ESC_ESC%% or %%CLICK_URL_UNESC%% -- Verify that the click macro is included in the correct portion of the click-through URL in your code.

5. %%VIEW_URL_ESC%% or %%VIEW_URL_UNESC%% -- For interstitial creatives, ensure that this macro is included in your creative's code.

6. As a best practice, we recommend using an unescaped (...UNESC) click macro when the creative hosted by another server is a standard image file such as a GIF or JPEG. You should use the double-escaped (...ESC_ESC) click macro for Flash creatives and certain third parties.

7. If you are using Google Publisher Tags (GPT), have you defined more ad tags in the webpage header than you display in the body section of your webpage? Ad tags that are defined in the header but not displayed in the body will be counted as impressions whenever the tag is loaded, but they won't make calls to third-party servers. That will lead to discrepancies. Make sure that all ad tags defined in the header are also displayed in the body of the webpage.

8. Are you comparing the same date range across the third party and publisher?

Do both DFP and the third party use the same time zone? Ad servers that report based on different time zones will return different results.

9. Are you comparing the same line items/ads?

10. Do you use the same third-party tags in any other line items in your network?

11. Did you confirm with the third party that the same tags have not been provided to any other publishers?

12. How large is the creative asset? Large creatives can have long load times and can cause differences in impression count timing.

13. Does the DFP report include unfilled impressions? Unfilled impressions will inflate DFP’s numbers by including instances where the third-party ad server was not called. 

14. Is the line item using geographic targeting on the third-party ad server? Different ad servers map IP address location data differently, leading to significant discrepancies.

Is the line item day- or time-parted on the third-party ad server? Day- or time-parting on the third-party ad server can lead to DFP counting impressions in situations where the third party does not return a line item.

15. Does the creative require calls to multiple third-party ad servers (also known as "daisy-chaining")? Each third-party ad server can lead to campaign variances of up to 20%. If one third-party server points to yet another third-party server, the expected discrepancy increases. (With 80% accuracy between each server, this results in a normal discrepancy of up to 36%, as shown in the following calculation: 1 - (1 - 0.2) × (1 - 0.2) = 0.36).

16. Does the third-party ad server use frequency capping? A third-party frequency cap will prevent an ad request from being filled despite the fact that DFP has counted an impression.

Source: Google support

Ad server – An Overview 

Computer system which stores, maintains and serves (uploads) advertising banners for one or more websites. Ad servers program, track, and report several statistics about website visitors which are used by advertisers to custom tailor ads and offers to suit different categories of visitors.

How Does Ad Serving Work?

Interactive ads are everywhere these days, but when it comes to the technical process of getting an ad on the page and how publishers and marketers verify it delivered, not many people can explain what actually happens in detail.  Read this article though and you’ll be one of them!  Below I’ve detailed step-by-step how a browser gets from the initial call to a publisher’s website to the final ad creative, and when and how each party counts an impression.  You can view a diagram of the ad serving process at the bottom of this post – the numbers in the text refer to the steps labeled in the diagram.

So, without further argument -

When a browser navigates to a publisher website (1), the publisher’s web server sends back a bunch of HTML code (2) that tells the browser where to get the content (3) and how to format it.  Part of the HTML code returned to the browser (4) will include a coded link known as an ad tag.

Here’s an example of what an ad tag from Doubleclick, one of the major ad serving companies, looks like:

http://ad.doubleclick.net/ABC/publisher/zone;topic=abc;sbtpc=def;cat=ghi;kw=xyz;tile=1;slot=728x90.1;sz=728x90;ord=7268140825331981?

The ad tag points the browser to the Publisher’s Ad Server (5), a system designed exclusively for delivering and tracking advertising.  In most cases, the Publisher’s Ad Server is actually a network of cloud servers owned and maintained by a separate company.  In this case, the content server tells the browser to fetch the ad from Doubleclick, a company owned by Google that then makes the very complex decision on which ad to serve using a program called an Ad Selector.

In many cases the ad server is deciding among thousands upon thousands of potential options in mere milliseconds.  The computational power behind the Ad Selector is mind blowing – Atlas, the major rival to Doubleclick calls the supercomputer running its Ad Selector “WARP” and it is among the most powerful in the world, making billions of decisions a day and trillions in its lifetime. 

The Ad Server makes a decision, and in most cases sends back another ad tag (6), or redirects the browser by pointing it to the Marketer’s Ad Server.  These redirects are technically speaking 302 redirects, which tell the browser the page has been “temporarily moved”. 

This allows Ad Servers to count the 302 call as an impression and host the actual ad content on a different server.  Once the publisher’s ad server sends the browser a redirect to the marketer, it counts a delivered impression in its own database (star).  The only exception here is if the publisher decides to deliver a house ad or the marketer has asked the publisher to “site-serve” the ads, both of which requires the publisher load the actual creative files into their ad server, meaning the publisher is the final destination, and the browser can skip the loop through the marketer side (steps 7,8,11,12).

The browser now calls the Marketer’s Ad Server (7) and is redirected yet again to a Content Delivery Network, or CDN, (8) a global network of cloud servers that actually house the raw creative graphics to fetch the actual Ad. 

Why, you ask?  Well, as powerful as ad servers are, they just aren’t equipped to handle the volume and bandwidth required to deliver content as heavy as image files.  Redirects are often nothing more than a 1×1 pixel requiring just a few bytes of memory.  Image files on the other hand are kilobytes or even megabytes in size, could be called millions of times a day, and require a much faster and robust infrastructure. 

Ad Servers might maintain three to six data centers across the world, but a CDN can process the heavy bandwidth and deliver the content faster because they operate hundreds of data centers and can route requests to the one nearest to the user, no matter where they are on earth.  You can think of the ad server as the brain and the CDN as the brawn.  Ad Servers aren’t the only companies that use CDNs; in fact many websites host their bandwidth intensive files in these cloud networks.  A CDN is almost always another independent company, such as Akamai, that hosts the heavy creative assets so the Ad Server doesn’t have to. There used to be a handful of these companies out there, but Akamai has acquired almost all of them and is the largest player by far in the space.

Here’s what a CDN redirect to an Akamai server hosting a flash file looks like:

http://spe.atdmt.com/ds/ABCDEF12334/filename123_300x250.swf

In addition to sending back the redirect to the CDN, the Marketer’s Ad Server also appends a second redirect (10) back to itself with a query string to fetch a 1×1 pixel (11) after the ad content has been called.  When the browser fires this last redirect calling a 1×1 pixel from the Marketer’s Ad Server (11), the Ad Server knows the ad was successfully downloaded and it finally counts an impression in its own database (star).

In many cases, your browser has to make at least four calls for site served ads and six in the case of third-party served ads for this whole process to work, if not even more, but shouldn’t take more than a second regardless of the number of parties involved. To visualize the process explained above, please see the diagram below – 302 redirects are highlighted in blue, and the ad creative is highlighted in red.

Source: www.businessdictionary.com and www.adopsinsider.com 

Advertising network – An Overview

An online advertising network or ad network is a company that connects advertisers to web sites that want to host advertisements.

The key function of an ad network is aggregation of ad space supply from publishers and matching it with advertiser demand. The phrase "ad network" by itself is media-neutral in the sense that there can be a "Television Ad Network" or a "Print Ad Network", but is increasingly used to mean "online ad network" as the effect of aggregation of publisher ad space and sale to advertisers is most commonly seen in the online space.

The fundamental difference between traditional media ad networks and online ad networks is that online ad networks use a central Ad server to deliver advertisements to consumers, which enables targeting, tracking and reporting of impressions in ways not possible with analog media alternatives.

Overview

The advertising network market is a large and growing market, with the top 20 companies earning about $2 billion in revenues during 2007. This represents around 13% of the total display advertising market, forecasted to grow to 18% by 2010. This growth has resulted in many new players in the market, and has encouraged acquisitions of ad networks by large companies entering the market.

Ad networks are primarily involved in selling space for online ads to appear. This online advertising inventory comes in many different forms, including space on websites, in RSS feeds, on blogs, in instant messaging applications, in adware, in e-mails, and on other sources. The dominant form of inventory continues to be third-party websites, who work with advertising networks for either a fee or a share of the ad revenues.

An advertiser can buy a run of network package, or a run of category package within the network. The advertising network serves advertisements from its central ad server, which responds to a site once a page is called. A snippet of code is called from the ad server that represents the advertising banner.

Large publishers often sell only their remnant inventory through ad networks. Typical numbers range from 10% to 60% of total inventory being remnant and sold through advertising networks.

Smaller publishers often sell their entire inventory through ad networks. One type of ad network, known as a blind network, is such that advertisers place ads, but do not know the exact places where their ads are being placed.

Large ad networks include a mixture of search engines, media companies, and technology vendors.

Types of ad networks

There are 3 main types of online advertising networks:

Vertical Networks: They represent the publications in their portfolio, with full transparency for the advertiser about where their ads will run. They typically promote high quality traffic at market prices and are heavily used by brand marketers. The economic model is generally revenue share. Vertical Networks offer ROS (Run-Of-Site) advertising across specific Channels (example: Auto or Travel) or they offer site-wide advertising options, in which case they operate in a similar fashion to Publisher Representation firms.

Blind Networks: These companies offer good pricing to direct marketers in exchange for those marketers relinquishing control over where their ads will run, though some networks offer a "site opt out" method. The network usually runs campaigns as RON or Run-Of-Network. Blind networks achieve their low pricing through large bulk buys of typically remnant inventory combined with conversion optimization and ad targeting technology.

Targeted Networks: Sometimes called “next generation” or “2.0” ad networks, these focus on specific targeting technologies such as behavioral or contextual, that have been built into an Ad server. Targeted networks specialize in using consumer click stream data to enhance the value of the inventory they purchase. Further specialized targeted networks include social graph technologies which attempt to enhance the value of inventory using connections in social networks.

There are two types of advertising networks: first-tier and second-tier networks. First-tier advertising networks have a large number of their own advertisers and publishers, they have high quality traffic, and they serve ads and traffic to second-tier networks. Examples of first-tier networks include the major search engines. Second-tier advertising networks may have some of their own advertisers and publishers, but their main source of revenue comes from syndicating ads from other advertising networks.

While it is common for websites to be categorized into tier, these can be misleading. 

While Google is in the clear majority of advertisement impression served, other networks that could be labeled as tier 2 actually dominate over this tier 1 Ad networks as far as the number of customers reached.

Source: Wikipedia.org

Social Media Marketing – An Overview

Twitter, Facebook, Delicious, etc., These are all examples of social media, and I bet as soon as you hear these words, you can add at least another three sites to the list off the top of your head. But what is social media?

Social media essentially is a category of online media where people are talking, participating, sharing, networking, and bookmarking online. Most social media services encourage discussion, feedback, voting, comments, and sharing of information from all interested parties.

It's more of a two-way conversation, rather than a one-way broadcast like traditional media. Another unique aspect of social media is the idea of staying connected or linked to other sites, resources, and people.

According to Ron Jones' - "Social media essentially is a category of online media where people are talking, participating, sharing, networking, and bookmarking online."

There is a wide variety of social media, ranging from social sharing sites such as YouTube and Flickr through social networks such as LinkedIn and Facebook.

In my opinion, social media has shot to the forefront of people's attention because it's fun. Thanks to social media, it's easy to share your ideas, photos, videos, likes and dislikes, with the world at large - and find out what they think of them. You can find friends, business contacts and become part of a community or a bunch of different communities. 

Social media gives you what TV never could - a chance to be engaged and engage others.

Because of this, social media is of particular interest to businesses. Currently, businesses of all sizes are experimenting with social media marketing, grappling with the question of how to get in on what appears to be an especially viral way to get their message (and their products) out there.

Insight of Social Media Marketing

Social media marketing is a recent addition to organizations’ integrated marketing communications plans. Integrated marketing communications is a principle organizations follow to connect with their targeted markets. Integrated marketing communications coordinates the elements of the promotional mix; advertising, personal selling, public relations, publicity, direct marketing, and sales promotion. Increasingly also viral marketing campaigns are grouped to integrated marketing communications.

In the traditional marketing communications model, the content, frequency, timing, and medium of communications by the organization is in collaboration with an external agent, i.e. advertising agencies, marketing research firms, and public relations firms. However, the growth of social media has impacted the way organizations communicate. With the emergence of Web 2.0, the internet provides a set of tools that allow people to build social and business connections, share information and collaborate on projects online.

Social media marketing programs usually center on efforts to create content that attracts attention and encourages readers to share it with their social networks. A corporate message spreads from user to user and presumably resonates because it is coming from a trusted source, as opposed to the brand or company itself.

Social media has become a platform that is easily accessible to anyone with internet access. Increased communication for organizations fosters brand awareness and better customer service. Additionally, social media serves as a relatively inexpensive platform for organizations to implement marketing campaigns. With emergence of services like Twitter, the barrier to entry in social media is greatly reduced.

Social media marketing is also known as SMO - Social Media Optimization, benefits organizations and individuals by providing an additional channel for customer support, a means to gain customer and competitive insight, recruitment and retention of new customers/business partners, and a method of managing their reputation online. Key factors that ensure its success are its relevance to the customer, the value it provides them with and the strength of the foundation on which it is built.

Finally it is a strong foundation to serves as a stand or platform in which the organization can centralize its information and direct customers on its recent developments via other social media channels, such as article and press release publications, etc.

Kinds and benefits of Social Media

Many social media sites come in the form of a blog, micro blog, podcast, video cast, forum, wiki, or some kind of content community. To help you understand social media better, let's break them down into basic forms or groups.

Social news: Sites like Digg, Sphinn, Newsvine, and BallHype let you read about news topics and then vote and/or comment on the articles. Articles with more votes get promoted to a more prominent position.

Social sharing: Sites like Flickr, Snapfish, YouTube, and Jumpcut let you create, upload, and share videos or photos with others.

Social networks: Sites like Facebook, LinkedIn, MySpace, and Twitter allow you to find and link to other people. Once linked or connected, you can keep up to date with that person's contact info, interests, posts, etc. Many people are connecting to friends and business associates with whom they had fallen out of touch. It's bringing the world together like nothing else has.

Social bookmarking: Sites like Delicious, Faves, StumbleUpon, BlogMarks and Diigo allow you to find and bookmark sites and information of interest. You can save your bookmarks online and access them from anywhere or share them with others.

This is just a sampling of social media sites. More are added daily. Breaking them down into these categories or groups will help you understand their focus and to consider which avenue is right for your approach to social media marketing.

Key Benefits:

Let's look at the general scope of social media universe.

• Five of the top 10 fastest-growing Web brands are user-generated content sites?
• Sixty-seven percent of businesses say that the best source for advice on products and services are their consumers?
• Forty-five percent of adult Internet users have created content online?
• There are about 1.2 million blog posts per day?

So do you think it would benefit you to tap into this ever-growing universe of social media? Absolutely! Many companies are trying to figure out how to get involved. They're shifting money from traditional marketing budgets to social media marketing because it:

• Helps manage company's or brand's reputation.
• Builds brand awareness and helps improve how people view your brand.
• Gets you closer to your customers. Learn about their needs then respond. Discuss converse, debate.
• Offers creative and effective ways to learn insights not previously available.
• Features new and inexpensive ways to support your clients.
• Is typically less expensive than traditional advertising.
• Offers various ways to measure and track performance.

Listed above are some of the key benefits to use the social media is the best channel to promoting the products or services through internet.

Source: scribd.com and searchenginewatch.com

How to Make Money From Blogs 

- Direct Methods

Different models that bloggers are using to make money from blogging into two areas – Direct and Indirect methods.

Direct Income Earning Methods - these methods are where a blogger earns an income directly FROM their blog.

Indirect Income Earning Methods – these methods are where a blogger earns an income BECAUSE of their blog.

Direct Income Earning Methods for Bloggers;

1. Advertising

There are many ways of selling advertising space on a blog (this could almost be a series of its own) but some of the different advertising options that I see bloggers experimenting with include:

Contextual Advertising – Programs like AdSense and YPN (beta) are very popular with bloggers and are probably the most common income stream being used by them today (MSN are developing one too). In short – these programs scan the content of your blog to assertion what its topic is and attempt to put contextually relevant ads (text and image) onto your blog. They are generally simple to use and involve pasting some code into your blog’s templates. 

Payment is on a ‘per click’ basis (referred to as CPC or ‘cost per click’ ads). Contextual ads suit blogs that have a particular niche topic, especially if it has some sort of commercial angle (i.e. it has products and services associated with it). They are not so good with ‘general’ type blogs (i.e., many topics) and/or political/spiritual blogs which argue just one side of a case (this confuses AdSense). I write much more extensively on how to use AdSense on your blog here.

Other CPC Advertising – There are a variety of other ad systems that pay on a per click basis which are not contextual in nature (which is important as systems like AdSense do not allow you to run contextual ads on the same page view as them). These systems include Chitika’s eMiniMalls (aff) which I reviewed here.

Impression Based Ads – Impression based ads pay a small amount for every person who views the advertisement. The amount that they pay varies from program to program (and ad to ad) and is generally a fraction of a cent. There are a variety of ad systems around like this including Fastclick (aff) which I reviewed here and Tribal Fusion. Impression based ads won’t earn you much if you don’t have a lot of traffic but can be great if you do.

Blog Ads – BlogAds have become something of an institution when it comes to advertising on blogs. They traditionally have had a focus upon monetizing political blogs but are expanding their focus lately. The beauty of them is that bloggers set their own rates and can accept or reject advertisers that apply to them to be featured on their blogs. These ads put the control of what ads show and how much they earn into the hands of the blogger. 

The downside is that if you price them too high you could never have any ads showing at all. They can also be difficult to be accepted into as a publisher as these days they only accept people into the system if they have someone who is already in ‘sponsor’ or recommend the new publisher.

Text Ads – Another increasingly popular way to sell ads on your blog is to look into text links. The beauty of these are that they don’t take up much room and that depending upon the system you choose to run them you can have control over which advertisers you accept and reject. AdBrite (aff) is one such system that gives you control in a similar way to BlogAds in that you set your own prices and approve all ads. They are also other formats of ads. Text Link Ads (aff) is another text link seller that more and more bloggers are using. The beauty of both of these systems is that they have a pool of advertisers already so you don’t have to go looking for your own advertisers. 

Their systems are also both very automated and are just a matter of pasting some code onto your blog. I use them both and while they don’t earn anywhere near as much as AdSense or Chitika for me they add up over the year and have done well for me. Bidvertiser and Adzaar are other system that I know are popular with some (we’ve used them quite successfully on b5media although I have little personal experience with them).

RSS Ads – An increasingly popular way for people to read blogs is via RSS. As a result publishers and ad providers have been keen to find ways to place ads in feeds. These attempts have been met with a variety of success levels. I’m yet to hear of too many people making big dollars with RSS ads yet but the ad systems seem to be improving. 

AdSense offers RSS ads to some of its publishers (you have to have a certain number of impressions first) as does YPN. Feedburner is a tool I’ve used to help monetize my own feeds – they give publishers three options (1. AdSense if you’ve been approved by them, 2. Amazon affiliate program and 3. If you have a lot of subscribers (over 500) they have an Ad Network). Pheedo is another system that you might like to try (although I’ve not had much experience with it).

Other Ads Systems – In addition to the above systems are many other advertising options which we’ve not had experience with and so won’t personally recommend. I’m sure they are worth experimenting with however as I see many of them being used by bloggers every day. Here they are in no particular order:

AdGenta, CrispAds, Clicksor, Intelli Txt, Peak Click, Double Click, Industry Brains, AdHearUs, Kanoodle, AVN, Pheedo, Adknowledge, YesAdvertising, RevenuePilotTextAds, SearchFeed, Target Point, OneMonkey, and TextAds. Feel free to add your own and tell us how you’ve gone with them in comments below.

2. Sponsorship

Another form of advertising that a smaller number of bloggers are using is to find their own advertisers. All of the above systems have the advantage of finding you advertisers (or at least assisting in the automation of ads to your blog) but as your blog grows in profile and influence you might find other options for private deals come up.

The big blog networks have people dedicated to the task of finding advertisers (often working through ad agencies) but smaller bloggers might find this worthwhile also. I’ve been selling ads on my Digital Camera Blog for two years now and as it’s grown in traffic and profile and managed to attract larger companies (who are willing to pay more) to buys space. Currently the blog features ads from Adobe who have bought a combination of banner, newsletter and text ads.

The key if you’re going to take this approach is to target advertisers in your niche that have products that closely relate to what you’re writing about. There are a variety of ads that you can offer them including banner ads, buttons, text links, mentions in newsletters and even individual post sponsorships. I would highly recommend that you always make it clear to readers that your post is a sponsored one when you’re writing a sponsored post.

3. Affiliate Programs

Affiliate programs are where you take a commission for referring a reader who purchases a product or service to a company. Probably the most common of these for bloggers is Amazon which has tens of thousands of products that you can link to (I reviewed it here). Other affiliate programs that represent many different companies and products include Linkshare, Commission Junction and Clickbank.

Affiliate programs take some work if you want to get the most out of them (perhaps more work than advertising) but can be lucrative if you match the right program with the right blog/topic. If you want to explore affiliate programs more you might like to read 10 tips for using affiliate programs on you blog.

4. Selling/Flipping Blogs

The idea of selling (or flipping) your blog is one that many bloggers have in the back of their minds for ‘one day’ but in reality it is not something that is overly common… yet (I think this is changing). Probably the largest sale is that of Weblogs Inc (a network of blogs) which sold to AOL for a reported $25 million. Of course this is the stuff that most of us can only dream of – but there are examples of smaller blogs being sold, either privately or via auctions on sites like eBay and SitePoint. One such auction was that of the Blog Herald which took place here.

Starting a blog with the main goal of selling it down the track is one that I’ve heard of a number of bloggers doing but few have been successful. Rather than starting with this intention I think if you start with the intention of building a quality site that has a large readership and it’s own good income stream you are more likely to find buyers down the track.

5. Donations and Tip Jars

A very small number of blogs have a history of making good money with these (Jason Kottke being one of them). To be successful with asking for money from readers you’ll want to have a large and loyal readership (and a rich one might help too). Most bloggers just don’t have the critical mass or the cult following to make it work.

6. Merchandise

Another method that some blogs use with reasonable effect is to sell T-Shirts, Mugs, Stickers etc with the blog’s name, logo and/or taglines on it. This is another idea that will probably only will work if you either have a brilliantly designed merchandise range and/or you have a cult-like status as a blogger with some fanatical readers who are a little obsessive about your blog. Some blog topics lend themselves to this more than others.

7. Selling Subscriptions

The idea of charging readers for content is one that surfaces from time to time. While there are numerous websites around the web that do this successfully (community membership sites) I’m yet to see many (any) blogs do it well. The problem that most bloggers who have tried it have run into is that most topics that you could think to start a blog about already have free sites available. To make it succeed you would need to have some sort of premium/exclusive content and/or real expertise on a topic.

8. Blog Networks

Another emerging income source for bloggers is blog networks. There are two ways to make money here. Firstly you can start a network and contract bloggers to write for you or secondly you might like to join a blog network as a writer. There are many networks out there and all have their own strengths and weaknesses. I’ll attempt to write a post on what to think about when you’re looking at whether to join a network later in this series.

Source: http://www.problogger.net