Internet Marketing: On-line Advertising

However you look at internet marketing, everyone has to agree that on-line-advertising is the big success story of internet marketing. Mostly this is thanks to Google who made their profits by ofering specific advertisements based on the content of the web page being navigated to and the nationality of the person doing the navigating. This allowed the small internet players to work on the same level playing field as the big operators. Indeed, Googles PPC (pay per click) operating model has been so successful that other players such as Yahoo!/Overture and MSN have entered the same marketing arena.

The truth is that online advertising is growing in popularity for many businesses to promote their products and services on the internet. With more and more of the world's population looking to the internet for news and information, it is no wonder that businesses are increasingly led to advertise online. It is cost effective and allows businesses a way to give more information to potential customers than most traditional forms of broadcast and publications. Online advertising technology advances are being made everyday that enhance what visitors would like to see.

On-line Advertising Costing Conventions

The tracking ability of the internet has allowed the tracking of the results of online advertising at a far more granular level that would ever be available through traditional advertising. As a result varying ways have developed for the advertisers and publishers to do business. The three most common ways in which online advertising is purchased are CPM, CPC, and CPA:

  • CPM (Cost Per Thousand) is paying for exposure of their message to a specific audience. CPM costs are priced per thousand.
  • CPV (Cost Per Visitor) is paying for the delivery of a Targeted Visitor to the advertisers website
  • CPC (Cost Per Click) advertising is also performance based and is common in search marketing, where it is often known as Pay per click (PPC). In this scheme, an advertisement may be displayed (and assumedly viewed) many times, but the advertiser pays based only on the number of user clicks. This system provides an incentive for publishers to target ads correctly (often by keyword), as the payment depends not upon the ad being seen but upon the viewer's responding and following the hyperlink.
  • CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays for the media on the basis of only the number of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge. Similarly, CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.
  • Cost per Conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending the situation: it is sometimes considered to be a lead, a sale, or a purchase and represents the latest 'wave' in internet marketing.

Forms of Advertising

eMail Advertising

This remains one of the mainstays of internet marketing and any marketer worth his/her salt will be generating and updating their email lists. This is also the worst cause of internet 'spam' (unsolicited emails) the bane of anyone on the internet. For this reason legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" to distinguish it from spam.

Affiliate marketing

Affiliate marketing is perhaps one of the biggest money-making practices on the internet today. This is a form of advertising where the advertiser allows a potentially large number of small publishers to pick specific creative elements or offers to market in exchange for payment should such marketing create sales or other revenue. This is usually accomplished through a self-service online system, such as those offered by third parties like Performics, Commission Junction/BeFree, Primeq or Linkshare.

Historically, affiliate marketing was an invention of CDNow.com in 1994 and was excelled by Amazon.com when it launched its Affiliate Program, called Associate Program in 1996. The online etailer utilized its program to generate enormous volumes of low cost brand exposure and at the same time provided small Websites a way to earn some supplemental income through their Sites.

Contextual Advertising

This is the big player in internet advertising where text-only ads are displayed that correspond to the keywords of an Internet search or to the content of the page on which the ad is shown. These ads are believed to have a greater chance of attracting a user, because they tend to share a similar context as the user's search query. For example, a search query for "flowers" might return an advertisement for a florist's website. These are the main types of ads served by Google, Yahoo!, Overture, MSN and others.

Rich Media Advertising

Though text advertising has been dominant in overall internet advertising terms things are now changing with Google and others displaying image adverts and video adverts. Indeed, internet advertising is increasingly being dominated by rich media using moving images and sound. Rich media advertising techniques make overt use of color, imagery, page layout, and other elements in order to attract the reader's attention. Some users might consider these ads as intrusive or obnoxious, because they can distract from the desired content of a webpage. Some examples of common rich media formats and the terms of art used within the industry to describe them:

  • Banner ada: An advertising graphic image or animation displayed on a website, in an application (such as Eudora), or in an HTML email. Banner ads come in numerous standard sizes defined by the IAB, but originally (in the mid to late 1990's) were only rectangular GIF images 468 pixels wide by 60 pixels high. Media types and sizes have since become much more varied.
  • Interstitial ad: The display of a page of ads before the requested content.
  • Floating ad: An ad which moves across the user's screen or floats above the content.
  • Expanding ad: An ad which changes size and which may alter the contents of the webpage.
  • Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed
  • Wallpaper ad: An ad which changes the background of the page being viewed.
  • Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
  • Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage.
  • Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows.
  • Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed.
  • Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps