Online Advertising - Sponsorships and Revenues

The reveune from advertising on the web has increased by many folds in the past few years.

While banner advertisements remain the predominant advertising vehicle on the internet - accounting for 54% of total online advertising revenues - the increased use of content sponsorships and interstitials and micro sites almost doubled during last year's second quater,marking a shift towards more creative advertising on the web.(www.ciaadvertising.com)

Sponsorships were the first means by which advertisers could get real estate online. Sponsorships of online content are much like event sponsorhips:the hope is that users will more closely associate the content with the advertiser. If an advertiser has a stricktly branding/awareness goal, sponsorships are an efficient way to achieve this marketing objective for a lower cost than traditional print. (www.ciaadvertising.com)

In a recent study by ad-serving firm Double Click, on Continental Airlines, it was found that 67.5% of sales conversions were attributed to online advertisemetns. Registrations for Continentals's e-mail newsletters, which wereals o measured in the the study,tended to occur soon after consumers saw the advertisement. After an hour, there was a 364% uptick over the control, 420% after one day, 377% after 14 days and 211% after a month. (Oser,2004) With results such as these, the number of business wanting to use online advertising to promote thier businesses is growing at a rapid rate.

Ad:Tech announced that internet advertising revenue had set a new record for the first quater: $2.3 billion, according to the Interactive Advertising Bureau and PricewaterCoopers. It is the highest recorded amount taken in during a quater since the companies began tracking advertising revenue in 1996. This is a milestone for online advertising, with future profits expected to continue climbing. The revenue earned in the current year (2004) is 38.8% higher than the same quater in 2003. (Oser,2004)

Demand for the most popular online advertising space in now so great that media owners are selling out months in advance and prices are rising. (New Media Age) Major online-adverting publishrs are finding themselves battling to meet soaring demand. The hottest spots include the home pages of the Big Three: Yahoo!, MSN and America Online.(Oser,2004).

'The Big Three' have a combined reach of 40% of all adults online, said Greg Smith, director-media practice,Carat Interactive. They are just like prime time (TV).(Oser,2004) However, media-buying firm Avenue A president, Jim Warner, said that "the web is not like TV, where there is an finite amount of inventory. At the top end there's some scarcity and it's sold in advance and it's creating premiums, but there's lots of inventory online"(Oser,2004)

Back to Online Advertising - History

Reference List

• www.ciaadvertising.com

• Oser,K(2004), 'Web ads get results weeks later', Advertising Age, July 26 2004.

• Oser,K(2004),'Online ad demand bumps up prices', Advertising Age, June 7 2004.

• Oser,K (2004),'Internet advertising reaches $2.3 bil high', Advertising Age,May 31 2004.

Skye Salleras 07:50, 29 Oct 2004 (EST)