Online advertising is advertising carried out in the online environment. For example, via Web Sites, email, ads supported software, etc. Though the vehicle/s have changed, (for example web space and advergaming as opposed to magazine and outdoor advertising) many of the basic principles remain the same as traditional advertising - organisations utilising paid space to promote their businesses.
Online advertising is an important element of a business online marketing operations. Online advertising is considered as non-personal information usually persuasive in nature about a product or service by an identified sponsor, hence all paid space on the web or in an e-mail (Strauss, El-Ansary and Frost, 2003, p 367). Businesses clearly recognise that by advertising online they reach their target market in a fast and an efficient way where they can interact with consumers; this is clearly indicated by the fact that advertising spending is up to 12.6% [1] during the first part of 2005. In Australia alone, online advertising expenditure rose by 64% in 2004 hitting a record high of $388 million (The audit Bureau of Circulations).
Online advertising can be divided into two categories: legitimate and illegitimate. Legitimate advertising can be found in the form of advertising networks and opt-in e-mail advertising. Illegitimate advertising is predominantly evident in spamming. Online advertising creates innovative, comparatively low cost and highly targeted opportunities for the online advertisers/marketers.
Spyware/Adware
Types of online advertising and the vehicles, which it is displayed within, grow daily as technology expands to create more opportunities. Some of them are intrusive and are usually labeled as spyware or adware. For example, Pop-up advertisements are designed to drive traffic to the sponsor’s website. They usually occur when a new browser is opened. Initially, pop-ups were extremely effective due to the surprise and novelty factor. However, constant and annoying pop-ups have left viewers jaded and resentful, and have increased sales for pop-up blocking programs. Pop-under ads were developed as a response to pop-ups perceived negativity. Pop-under work in a similar way to pop-ups, except they appear behind the newly opened browser and so are only visible after the viewer closes the page.
Web Banner
Web banners or banner ads are advertisements that are embedded into web pages similar to the way advertisers pay for space within a magazine. Web banners are designed to drive traffic to a website and account for 54% of total online advertising revenue [2]. Web banners and pop-ups can be the useful tools for online advertisers; however new web browsers provide the web surfer with options to prevent pop-ups and turn off images from selected (or all) websites. Beside that, similar to the protection of computer against the virus here come the anti-spyware or anti-adware softwares, such as SpywareBlaster and Lavasoft Ad-Aware.
Web Portal/Portal Site
Web portal or portal site is another way of online advertising. Through web portal there are more chances to exploit all the user by putting up web banners. Thus, the advertisers can target the user at one place by choosing the relavant category provided in web portal. For example, Yahoo! have provided users with search engines, email, chat rooms, instant messaging tools, etc., which are all free for registration, with web banners or interactive broadband commercial included. Using this strategy can attract more users to visit their website and use their product, at the same time increase the number of advertisers to advertise.
Weblog/Blog
A more recent addition to the online advertising repertoire are weblogs or blogs. The full economic impact blogs will have on businesses at the current time are immeasurable; it is obvious however that they hold significant impact as they have had the power to generate awareness, burnish brands, direct online traffic and alter the existing organic flow of traffic. But this has once given a chance to the spammers by adding link to their commercial website in others' blogs, which is called blog spam or link spam.
Interactive Broadband Commercial
Another type of online advertising that is rising in prominence is Interactive Broadband Commercials: TV-like "video ad" units placed in the virtual marketplace, a highly targeted way to reach consumers. Examples of content include (but are not limited to): streaming video, animation, online gaming, and online music video content in a player environment. These ads can be put out in live, archived, and downloadable streaming content.
There are hundreds of other examples and types of online advertising tools and techniques, increasingly the list is restricted only by a marketers imagination.
“Customization is a website’s ability to present individualized content for each user�? (Mcgraw-hill, 2004, p186). There are two different ways for a website to customize their site for users: personalization and tailoring. Personalization allows the user to customize the personal preferences on the site. To be able to give the specified preferences to the user each time they log on to the page, the website uses Log-in registration and/or cookies ( Mcgraw-hill, 2004, p186). Tailoring is used by the site to publish a unique version of the site to address the users specific interests, habits and needs (Mcgraw-hill, 2004, p187).
Since internet marketing can reach such diversified audience, broad or narrow, targeting is a very important part of the marketing program. A marketing manager needs to decide the geographic, demographic, psychographics and behaviour towards the product of the audience to reach. Tracking often uses cookies, which is a file that is installed on the consumer’s computer, and then tracks the behaviour of the user. By doing this the website is able to provide more relevant ads. However critics argue that the use of cookies is a invasion of privacy and can be seen as surveillance of internet users. However the advertising industry are also using different techniques to target the consumers. Some of these techniques have by some experts been seen as a bit controversial, such as adware and spyware programs. Some of the relatively new forms of online advertising include: advertising networks, sponsorships and microsites, interstitials and intermercials and search engine optimization (SEO).
Inline with the traditional offline marketing approach of mixing advertising, marketing, and promotion techniques, online marketing is made up of more than just advertising. Site layout and features, editorial content (on the organisation’s site, as well as cross promotion and/or a media campaign targeting online authorities in related fields similar to an offline media campaign), sponsorships, competitions, giveaways and integrated online/offline campaigns are all designed (in effective websites) to work together, complementing each other and to ensure not only return traffic to an e-tailers site, but to ensure consistent brand messages are sent to consumers.
Email marketing is the most utilised form of direct marketing in the online environment. Email is an effective format for marketers to use as it provides a quick and efficient way to communicate both commercial messages to a specified audience, allowing customised mass communication.
People commonly use links and searching tools on a portal site to search for information on the internet. Typing in the words or phrases related to what they are looking for and waiting for the search engines to list out the relevant sites. Thus Search Engine Marketing (SEM) is a highly effective method of driving highly targeted visitors to one’s web site. SEM is based on search engine optimization (SEO), search engine submission, link popularity, and log file and traffic analysis. These basics allow positioning of one’s site for maximum search engine visibility.
Pay per click (PPC) or also known as cost per click (CPC) is the amount or commissions that the advertisers will pay to the affiliate for each click on their ad banners. Pay per click advertisements are commonly used in web portal and affiliate programs, for example Google AdWords and Hits4Pay respectively. In web portals, it is mostly in the form of text ads which are placed near the search result.
Rich (media) advertising was a concept dreamed up to help marketers reach consumers jaded with traditional static advertising. With click through rates (CTR) averaging at a startlingly low 0.5% (Miletsky, 2002), it became evident that banners that entertained or surprised viewers with their interactivity before they were even clicked had a definite edge (Mand, 1998). Flash, Shockwave, Real Audio/Video, pull-down menus, search boxes and applets allow for new levels of interactivity.
Interactive media offers marketers many opportunities not readily available in traditional offline sources. For example companies are now able to offer flash-based demonstrations or tutorials of their products online. Advances in computer and video gaming has allowed companies to not only buy space within games to promote their product or brand (for example a billboard within popular driving game “Grand Theft Auto: San Andreas�?) but to have games integrate their product and to build components of the game around their product - although this has raised discussions regarding maintaining the integrity of a game so it does not become purely an advertising vehicle which will turn gamers off (See advergaming; gamevertising). Expanding interactive media technology has become a catalyst for and product of collaborative approaches in forming or redefining products and services in the marketplace, resulting in innovative ideas becoming reality on a daily basis (Adegoke, 2005).
RSS is stands for Rich Site Summary or Really Simple Syndication which is a XML-based format to syndicate content among different websites. RSS advertising is the integration of RSS into online advertising. According to Pheedo, by integrating online advertising into an RSS feed, a new online advertising technique, it has achieved measurably better results than e-mail for its client. RSS advertising can avoid from Spam, email filtering and pop-up blocking system.
As with any type of advertising, advertisers want to know how effective online advertising is before spending their advertising budgets. One of the practical aspects of the internet is the possibility to measure everything via specific set up of websites and back end systems (Lindstöm and Andersen, 2001, p238). There are many ways to track the performance of an ad. The most common ways to measure effectiveness are: impression or page views, click-through rates and referrals (Cox and Koelzer, 2004, pp. 199-200).
“An advertising network is an organization or broker representing numerous websites that sell advertising placements�? (Advertopedia.com, 2005). This means that one marketer can go to one company and get its advertising published in several of different web-sites. This gives an advantage because it centralizes the management, making it more efficient, and in this way it can offer many different services. For the advertiser it often means cheaper rates and more targeted advertising (Lindstöm and Andersen, 2001, p 245). There are a variety of different advertising networks including: Google Adsense, DoubleClick and BURST! Media.
The constant rise of information technology, providing the user with services through the electronic realm, has resulted in swarms of scammers, spammers, hackers, thieves and cases of online fraud (also known as internet fraud). Online privacy and security issues are becoming a priority. To counter such concerns, a number of organizations have been constantly updating their policies and guidelines to better streamline the ambiguity of online privacy and security. The guidelines include identifying criteria for an effective privacy policy, including provisions for notice and disclosure, choice and consent, data security, and data quality and access. The main function of these organizations is to get both big and small online businesses in adopting privacy policies that create an environment of trust online. With the various strategies adopted by marketers, it is also the responsibility of enterprise to maintain ethical acts of marketing in the virtual space. “Ethics and privacy are often spoken of together, particularly when criticizing internet marketing practices�? (Spiegel. P117. 2004).
There has been a gradual shift in perception from the net as an advertising tool to the net as a branding tool. Initially the internet was viewed by businesses as a direct sales tool, a call to action similar to POP (point of purchase) displays in stores that urge buyers to make on the spot purchases. However there has been a shift in focus and increasingly the view is that the real value in online advertising is in brand recognition (Miletsky, 2002). Studies were done to measure the effectiveness of new media technologies online. In particular, Interaction Involvement Theory (Shedletsky & Aitken, 2004) discusses the correlation between a user’s involvement with something and their recall of it at a later date. This theory suggests that websites and advertisements with increased interactive elements have a greater chance of being remembered by a viewer. Such a theory would therefore have a fair impact on the internet’s use as a branding tool.
