Internet Advertising

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The emerging advertising use of Internet technologies have amounted to an explosion of revenue worldwide due to increased key insight and revolutionary advertising innovations.
Internet is used for a mixture of communication, research and entertainment purposes. These various uses of the World Wide Web have showed exponential growth along with the effectiveness of advertising throughout the Internet. One person who helped make this possible was Bill Gross. As an Internet entrepreneur Gross developed various Internet advertising prototypes, one of which lead to the innovative search engines Goto.com, eventually named Overture. Overture was later revamped into a system that places various advertising links next to relevant search results and charging only for clicks, which was called Adwords. Adwords finally led to Google’s Adsense, which was a system that integrated sponsored links on various online newspapers already apart of the Google Network and thus began the alternative, emerging media. (Economist, 2006)




There are many different types of advertisements throughout the Internet. Many are categorized by either pop-up, pop-under or banner advertisements. Banner advertisementsare embedded in web pages to attract traffic to a particular website via jpegs, flash or any other type of multimedia, by linking it to a corresponding website of the advertiser. Another form of online advertising is the pop-up. Pop-upsappear right in front of the viewing audience. They are intended to divert attention as well as capture email addresses from those users interested in knowing more about the featured advertisement. As a by-product of pop-up ads, a pop-underis an inventive technique that opens a new browser window hidden under the active window. While they do not interrupt the user immediately, they effectively inform the user after the main window is closed. In terms of revolutionary advertising media, there is no other channel that has produced such innovation and growth than that of Internet advertising. Whether it was the creation of Gross’ Adwords, the adoption of Google’s Adsense, or the integration of pop-up, pop-under and banner ads; Internet advertising has displayed competitive advantages that can help target the proper audience and increase the efficiency of advertising worldwide.


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Banner advertisements terminology is quite developed and involves many different areas of study. The term “hit” is used to describe the number of times an ad has requested a webpage or graphic image. This statistic has been found to be misleading given accidental “hits” and thus has been replaced by the term “page view” which corresponds to the number of times a banner has been viewed with respect to a specific length of time. Although it may seem as though banner ads were more effective in the early days of the Internet, there was a radical revaluation of their value thanks to Google’s Adword and websites like Goto.com.


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Pop-ups may be annoying however they are more effective than banner ads. Whereas a banner ad may get two to five clicks per 1,000 impressions, a pop-up ad might average 30 clicks. Therefore, some advertisers are willing to pay more for pop-up and pop-under ads. Typically, a pop-up ad will pay the web site four to ten times more than a banner advertisement. (Wilson, 2009) Numerous advertisers on the Internet also use pop-up and pop-under ads. The pop-under has even obtained patentstatus, which makes it the first advertisement model to do so. The pop-under ad has also been proven to be effective by major publishers including CNNand The Wall Street Journal. (Olsen, 2004)
Internet advertising is exploiting its already effective properties such as flexibility, efficiency and its ability to capture a narrow target market to further prove itself against the older channels of television and magazines. The Internet capitalizes on the lack of ratings that television advertisements have seen since the development of DVR's and the introduction of TiVo. (Wharton, 2009) Some statistics state a 27% greater ability to recall a brand after viewing an Internet ad prior. Magazines follow-up with a 26% consumer brand recall, newspapers at 23% and television with 17%. (Meeker, 2006) The Internet has proven to produce higher brand recall than that of other media as well as the ability to gain a massive yet narrow reach through its placement and delivery.



Tracking the response of the advertisements has proven to be useful as well by increasing the adaptability of a firm’s ad in response to changes. Internet advertising also allows for a large variety of creative ways to get one’s main point across. Whether it is text, an image, or even an advergame, the variety available in terms of size, place, and delivery has contributed to the success of advertising on the Internet.
While Pop-up ads prove to be quite effective, the existence of pop-up blockers by the web browsers Mozilla, Internet Explorer and Opera have proven to be inhibiting to this particular advertisement (Olsen, 2004). Ethical concerns have also been a limitation for Internet advertising considering the integration of distracting banners and their potential to be misleading. Certain privacy and malware issues have led to more interference by the Federal Trade Commission and thus more restrictions. (FTC, 2000)



In addition to ethical concerns, some annoying advertisements can serve more as a distraction than an effective marketing tool. While banner ads are used to attract attention, the firms must be aware of the fine line between successful and irritating. There is also an increase in skepticism and avoidance by the Generation Y’s and the Echo Boomers due to their familiarity with the Internet and their desensitized nature. Individuals growing up in these eras have a tendency to ignore Internet advertisements given their experience and tolerance levels. (Austin, 2009) The costs involved in purchasing pop-up, pop-under, and various other multimedia ads have also been considered quite limiting.
The costs of advertising throughout the Internet vary by type and are measured in the following three ways: Cost per Mille (CPM), Cost per Click (CPC) and Cost per Action (CPA). CPM’s are target market specific and involve the count per mille, or per one thousand impressions. CPC’s, also known as pay-per-click, involve a payment each time a user clicks on a specified listing. Finally, CPA’s are generally performance based and tend to be the rate of pay for banner advertisements. (Meeker, 2006) These new payment techniques allow advertisers accurate and measurable actions by consumers. The immediate feedback can be easily analyzed to create a better awareness on pricing, messaging and overall positioning across media. (Wilson, 2009)



An important aspect of Internet advertising is that of space sharing. Space sharing consists of using the same web space to display several different ads. Websites using shared space ads usually have “niche” markets viewing their products and/or services. (Olsen, 2004) Even though these advertisements are sharing time, they are strategically placed in high traffic areas. Still, some advertisers feel the need to buy smaller portions of more expensive spaces. By these ads being shown more often their overall reach and frequency increases. Without paying the extra cost it is left up to chance whether or not the advertisement will be seen by a given individual. Space sharing also facilitates in targeting specific subsets of the market. There are two types of scheduling that reference specific parameters generated by the web designer. The first is off-line scheduling which features an entire set of ads to be scheduled in advance. The second is on-line scheduling, which is a request to purchase ad space in the order in which it was received without the knowledge of future advertising request by other firms. The scheduling and the space sharing of advertisements is an ongoing battle fighting for further reach and frequency.



The search engine has been an outstanding performer in Internet Advertising considering its abilities to query results and connect them with other corresponding advertisements. Google, whose search engine dominates the industry and has grown from $411 million in worldwide ad revenue in 2002 to more than $22 billion annually, now exemplifies this best. The company's ad revenue rose “7 percent in the third quarter,” which is the fastest pace this year thus far. (Liedtke, 2009) The websites that have sold the most in Internet advertisements are as follows: CNN.com, ESPN.com, Excite.com, Weather.com, and Nytimes.com. (Nielsen, 2009)
Advertising throughout the Internet has just come into full swing. Having so many advantages and benefits for the advertiser and consumer alike, you can be sure the future holds more evolutionary growth for Internet advertising. With the inevitable advancement in technology, online advertising will feature vast improvements while it continues to prosper and grow.





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