Internet advertising
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Internet 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 Internet advertising include contextual ads on search engine results pages,
banner ads, Rich Media Ads, Social network advertising, interstitial ads, Internet
classified advertising, advertising networks and e-mail marketing, including e-mail
spam.
[edit] Competitive advantage over traditional advertising
One major benefit of Internet 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. Internet 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.
[edit] Revenue models
The three most common ways in which Internet 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.
[edit] Privacy
See also: HTTP cookie#Privacy and third-party cookies
The use of Internet 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. [2]
[edit] 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 Internet users, many
of whom are not computer-savvy, frequently lack the knowledge and technical ability to
protect themselves from these programs.
[edit] Ethics
Internet 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 Internet 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 Internet 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. [3] 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 Internet 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 Internet marketing to insure
consumer satisfaction, through the use of Internet 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[4].
[edit] Types
Though, as seen above, the large majority of Internet advertising has a cost that is
brought about by usage or interaction of an ad, there are a few other methods of
advertising Internet 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 Internet 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.
[5]
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.
[edit] E-mail advertising
Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail
advertising" to distinguish it from spam.
[edit] Affiliate marketing
Main article: Affiliate marketing
Affiliate marketing is a form of Internet advertising where advertisers place campaigns
with a potentially large number of small (and large) publishers, whom are only paid
media fees when traffic to the advertiser is garnered, and usually upon a specific
measurable campaign result (a form, a sale, a sign-up, etc.). Today, this is usually
accomplished through contracting with an affiliate network.
Affiliate marketing was an invention by CDNow.com in 1994 and was excelled by
Amazon.com when it launched its Affiliate Program, called Associate Program in 1996.
The Internet retailer used its program to generate low cost brand exposure and provided
at the same time small websites a way to earn some supplemental income.
[edit] Behavioral targeting
In addition to contextual targeting, Internet advertising can be targeted based on a
user's past clickstream. For example, if a user is known to have recently visited a
number of automotive shopping / comparison sites based on clickstream analysis
enabled by cookies stored on the user's computer, that user can then be served auto-
related ads when they visit other, non-automotive sites.
[edit] Semantic advertising
Semantic advertising applies semantic analysis techniques to web pages. The process
is meant to accurately interpret and classify the meaning and/or main subject of the
page and then populate it with targeted advertising spots. By closely linking content to
advertising, it is assumed that the viewer will be more likely to show an interest (i.e.,
through engagement) in the advertised product or service.
[edit] Ad server market structure
Given below is a list of top ad server vendors in 2008 with figures in millions of viewers
published in an Attributor survey. Since 2008 Google controls estimated 69% of the
Internet advertising market.[6]
Vendor Ad viewers (millions)
Google 1,118
DoubleClick
1,079
(Google)
Yahoo! 362
MSN (Microsoft) 309
AOL 156
Adbrite 73
Total 3,087
It should be noted that Google acquired DoubleClick in 2007 for a consideration of $3.1
Billion. The above survey was based on a sample of 68 million domains.
