Transcript Eyeblaster

Growing New
Markets
Prof. Markus Christen
INSEAD Singapore
May/June 2007
What They Did (2003-2004)
 Agencies (existing target expanded value proposition)
• Allowed regular banner at competitive rates
• Introduced a 100k Polite Banner (3 times greater file size than standard)
• Behavioral ads
 Agencies - creative arm (expanded target same value proposition)
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Set up a Creative Services Department (to understand needs and serve)
Launched industry first Creative Spec Database with Validation Tool
Enhanced Offline Ad-Demo Generator
Led to the synchronized ad format (later)
 Publishers (“new” target “expanded” value proposition)
• VideoClip Module
• Video Strip
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
What They Did
Did not accept any deals based on CPA or CPC!
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Developments (2003-2004)
 Regular banners used primarily as a monitoring tool
• a comparison to show you difference in effectiveness (“bait and switch”)
 Direct Response
• only if fit with interactive components not if desired with the pure performance
based pricing
 E-Commerce/Corporate Sites
• still slow, small part of business (eBay)
 Promotions: primarily for new formats to end user
• Volume Discounts: specific times of year (academy awards)
• Many more deals with publishers – but those not heavily publicized
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
What Happened
 2003 Results
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Served more than 1400 total campaigns (40% increase)
Delivered more than 2 billion impressions
Revenues of $8.5 million (up 70%)
Operating margins still around 30%
Clients running multiple format campaigns increased 250%
$8 million in VC funding (Insight Venture Partners)
 2004 Results:
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Served more than 2,285 total campaigns (60% increase)
Delivered more than 5.5 billion impressions (up 180%)
Revenues of $14 million (up 65%)
Floating ads less than 30% of all impressions
 Over 500 agencies use the Eyeblaster Platform; over 1,500 web publishers are
Eyeblaster-enabled
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
What Happened
 2005 Results
• Revenues near $20million and operating profit of 28%
• Served more than 32,000 ads
• Served more than 3,100 campaigns
– While the number of campaigns increased by only 14%, the size of the average campaign
increased significantly and more of these ads contained a video component
• Delivered more than 11 billion impressions
– The average number of impressions per ad increased 50%
• Served more than 12,000 video ads
– The percentage of ads containing video increased from 9% in 2004 to 38%
 Firm
• Global employee base grew to 114 by end of 2005 (48 in 2003, 75 in 2004)
• New offices opened: Eyeblaster now operates in 16 offices in 11 countries
• Increased client base of agencies, advertisers and publishers around the world
– More than 700 agencies (media and creative shops)
– More than 1,200 publishers
– More than 1,300 advertisers
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Developments 2006
 Eyeblaster dedicated time and investment to develop
• More Video Solutions with Pre-Roll
– Pre-Roll is the online version of television commercial spots and can be placed before,
between, and after online video content, providing more interactivity and measurable results
than standard television ads.
• Synchronized ads
– Several coordinated parts of the ad appear on the page (different locations, different times,
reflect a behavioral component)
• Gaming Initiatives and Gaming Survey
– Started development of tools and access to enable rich media ads in the gaming environment
– Eyeblaster also conducted a survey, to determine the attitudes of online gamers towards
watching video ads in the gaming environment (http://www.miniclip.com/)
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78% of the total respondent population said they would watch a short video in exchange for free game plays
71% of total respondents do not find video ads intrusive in the free game environment
• Mobile Initiatives
– Eyeblaster started investigating way to enable rich media ads on mobile devices
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Competition
 Point Roll purchased by Gannett for
$100million (estimated 6 times
revenues for past 12 months)
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 DoubleClick purchased by Click
Holding (subsidiary of private equity
investment) for $1.1Billion
Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Competition
Single Solution for
All Rich Media
Broad Range of
Formats & Features
Publisher Focused
RM Programs &
Tools
Tiered Services &
Expert Support
Video Capabilities
Tracking, Reporting &
Analytics
Integrated Ad Server
Offering
Templitized Rich Media
Full
Full
Yes
Yes
Full
Full
Full
Full
Gannett/
PointRoll
Limited
Limited
Yes
Yes
Limited
Limited
Limited
No
Klipmart
Limited
Limited
No
Yes
High
Limited
Limited
No
Double
Click
Limited
Limited
No
No
Limited
Full
Proprietary only
No
aQuantive Atlas
Limited
Limited
No
No
Limited
Full
Proprietary only
No
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© Prof. Markus Christen
Online Advertising
 What do you think the effectiveness of online advertising will be in
5 years?
 Will rich media be eventually ignored?
 Will consumers prefer to pay for content and not endure ads?
 Can companies like eyeblaster keep coming up with new formats
that will make us endure ads and not tune out?
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Online Advertising Trends
Online Ad Spending Will More Than Double by 2009, Totaling $22.3 Billion
Dollars in billions
$25
$22.3
$20.2
$17.8
$20
$15.6
$12.9
$15
$9.6
$10
$5
$0
2004
2005
2006
2007
2008
2009
Source: eMarketer, 9//2005
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© Prof. Markus Christen
Online Advertising Trends
Broadband Penetration Continues to Increase:
By 2008, More Than 50% of U.S. Households Will Have Broadband
Percent of all US
households
56.3%
60.0%
49.8%
50.0%
40.0%
42.9%
36.2%
30.0%
20.0%
10.0%
0.0%
2005
2006
2007
2008
Source: eMarketer, 2/2005
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Online Advertising Trends
Rich Media Spending Continues to Rise:
Spending Will Grow an Average of 30% Each Year for The Next 4 Years
In Billions
$4.0
3.6
2.9
$3.0
2.3
1.8
$2.0
1.3
1.0
$1.0
$0.0
2004
2005
2006
2007
2008
2009
Source: eMarketer, 11/ 2005
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Online Advertising Trends
Financial Services and Telecom Are Leading Categories for Rich Media Advertisers:
Rich Media Ad
Impressions in
The US, By
Industry
Financial Services
Telecommunications
Web Media
(in billions)
18.83
Retail Goods/Services
Entertainment
17.03
Travel
Public Svcs
Software
B2B
0
33.75
20.07
Automotive
Health
44.03
20.21
Consumer Goods
Hardware/Electronics
48.70
16.18
13.12
12.69
7.20
6.20
5.56
10
20
30
40
50
Source: eMarketer / Nielsen//NetRatings AdRelevance, DoubleClick, May 2005
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Online Advertising Trends
Online Video is On the Rise:
Spending Will Total More Than $1.5 Million by 2009 – Up 11x from 2004
Online Video
Ad Spending
in the US:
2004-2009 (in
Millions)
2004
2005
2006
2007
$135
$225
$385
$640
$1,050
2008
$1,500
2009
Source: eMarketer, November 2005
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Online Advertising Trends
The Power of Rich Media and Video: Video Prompts Action
Of consumers who have seen a product
advertised in an online video ad:
34%
10%
Checked out a
related website
15%
Forwarded an ad
9%
Requested more
information
Made a purchase
14%
Went to a store to
see the product
Source: OPA, Drivers & Barriers to Online Video Viewing, 2/2005
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Innovation and Marketing
Launch
Innovation
Value Creation
Continued
Improvement
Value Extraction
Market realities after
first generation product
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Where to Go After First Success?
New
Do we need to change:
Value
Proposition
Communication Strategy
Go-to-market Strategy
Pricing/revenue Strategy
Existing
Existing
New
Target Market
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Market Driving Strategies - May/June 2007
© Prof. Markus Christen
Change in Positioning
The out of banner ad
platform
Explain and create
awareness for rich media
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The rich media
platform
Renowned leader in
rich media
Market Driving Strategies - May/June 2007
© Prof. Markus Christen
The unified digital
marketing solution
Best in providing
digital marketing solutions
across multiple channels