Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.
Sunday 20 February 2011
Competitive advantage over traditional advertising
One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy.
Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search results of related keywords.
Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search results of related keywords.
Revenue models
The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.
* CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an advertisement. However, some impressions may not be counted, such as a reload or internal user action.
* CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website.
* CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders and interstitial ads).
* CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.
* 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 only for the amount 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 as it ignores any inefficiency in the sellers web site conversion funnel.
o 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.
o Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.
o CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways.[1]
* 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 on the situation: it is sometimes considered to be a lead, a sale, or a purchase.
* CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an advertisement. However, some impressions may not be counted, such as a reload or internal user action.
* CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website.
* CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders and interstitial ads).
* CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.
* 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 only for the amount 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 as it ignores any inefficiency in the sellers web site conversion funnel.
o 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.
o Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.
o CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways.[1]
* 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 on the situation: it is sometimes considered to be a lead, a sale, or a purchase.
Privacy
The use of online advertising has implications on the privacy and anonymity of users. If an advertising company has placed banners in two Web sites. Hosting the banner images on its servers and using third-party cookies, the advertising company is able to track the browsing of users across these two sites.
Third-party cookies can be blocked by most browsers to increase privacy and reduce tracking by advertising and tracking companies without negatively affecting the user's Web experience. Many advertising operators have an opt-out option to behavioural advertising, with a generic cookie in the browser stopping behavioural advertising.
Third-party cookies can be blocked by most browsers to increase privacy and reduce tracking by advertising and tracking companies without negatively affecting the user's Web experience. Many advertising operators have an opt-out option to behavioural advertising, with a generic cookie in the browser stopping behavioural advertising.
Malware
There is also a class of advertising methods which are considered unethical and may even be illegal. These include external applications which alter system settings (such as a browser's home page), spawn pop-ups, and insert advertisements into non-affiliated webpages. Such applications are usually labelled as spyware or adware. They may mask their questionable activities by performing a simple service, such as displaying the weather or providing a search bar. These programs are designed to dupe the user, acting effectively as Trojan horses. These applications are commonly designed so as to be difficult to remove or uninstall. The ever-increasing audience of online users, many of whom are not computer-savvy, frequently lack the knowledge and technical ability to protect themselves from these programs.
Ethics
Online advertising encompasses a range of types of advertising, some of which are deployed ethically and some are not. Some websites use large numbers of advertisements, including flashing banners that distract the user, and some have misleading images designed to look like error messages from the operating system, rather than advertisements. Websites that unethically use online advertising for revenue frequently do not monitor what advertisements on their website link to, allowing advertisements to lead to sites with malicious software or adult material.
Website operators that ethically use online advertising typically use a small number of advertisements that are not intended to distract or irritate the user, and do not detract from the design and layout of their websites.[2] Many website owners deal directly with companies that want to place ads, meaning that the website linked to by the advertisement is legitimate.
The overuse of technologies like Adobe Flash in online advertising has led to some users disabling it in their browsers, or using browser plug-ins like Adblock or NoScript. Many sites use centralized advertising services whose advertisement may be blocked as a side effect of security and privacy measures, because the services require JavaScript and cross-site requests to function, while such features are often not necessary to use the sites and are a potential source of vulnerabilities.
Some companies perform customer engagement studies in online marketing to insure consumer satisfaction, through the use of online compliance centers, building and deploying fraud detection tools, while inspecting websites and publishers to insure website pages offer the highest degree of information security and compliancy with Can Spam Requirements
Website operators that ethically use online advertising typically use a small number of advertisements that are not intended to distract or irritate the user, and do not detract from the design and layout of their websites.[2] Many website owners deal directly with companies that want to place ads, meaning that the website linked to by the advertisement is legitimate.
The overuse of technologies like Adobe Flash in online advertising has led to some users disabling it in their browsers, or using browser plug-ins like Adblock or NoScript. Many sites use centralized advertising services whose advertisement may be blocked as a side effect of security and privacy measures, because the services require JavaScript and cross-site requests to function, while such features are often not necessary to use the sites and are a potential source of vulnerabilities.
Some companies perform customer engagement studies in online marketing to insure consumer satisfaction, through the use of online compliance centers, building and deploying fraud detection tools, while inspecting websites and publishers to insure website pages offer the highest degree of information security and compliancy with Can Spam Requirements
Types
Though, as seen above, the large majority of online advertising has a cost that is brought about by usage or interaction of an ad, there are a few other methods of advertising online that only require a one time payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1 per pixel of advertising space and their advert would remain on the homepage for as long as the website exists with no extra costs.
* 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. This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and online advertising.
* Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
* Mobile ad: an SMS text or multi-media message sent to a cell phone.
* Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video, 3D content or Flash to provide a TV-like advertisement. Used to be known as Unicast Transitional ads as they were originally made by Unicast Communications but the company was acquired by Viewpoint Corporation in 2004, which then changed its name to Enliven in 2008.[4]
* Interstitial ad: a full-page ad that appears before a user reaches their original destination.
In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers.
* 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. This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and online advertising.
* Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
* Mobile ad: an SMS text or multi-media message sent to a cell phone.
* Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video, 3D content or Flash to provide a TV-like advertisement. Used to be known as Unicast Transitional ads as they were originally made by Unicast Communications but the company was acquired by Viewpoint Corporation in 2004, which then changed its name to Enliven in 2008.[4]
* Interstitial ad: a full-page ad that appears before a user reaches their original destination.
In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers.
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