Overview
Online advertising – where do you start and where will it end?
With an audience of over 32 million people in the UK, no marketer worth their salt would plan an advertising campaign that didn’t include some kind of online presence.
From the simple familiar formats like banners and skyscrapers, to sponsored search, to ads popping up on specific words in the text you are reading or over locations that you search on Google Maps… the ways to deliver advertising messages on the web (and email and mobile) are developing - both creatively and technically - as fast and in as many varied forms as the internet itself.
The key difference with online advertising is that it is the first truly interactive medium and the first truly measurable one, especially compared to broadcast TV and radio. Clicks can be tracked closely, almost in real time and easily associated with a wealth of demographic information. This has caused a rapid swing towards online and away from traditional media over recent years – the UK online advertising sector is growing at a phenomenal rate and was worth over £2.8billion in 2007.
Similarly to print advertising, online ad spend can be divided into classified (small ads, recruitment advertising, sponsored search) and display (banners, skyscrapers, MPUs and overlays*) but from there, the online world has no parallels.
Over time, banner ads have become less useful as people have learned to tune them out, and they have limited creative scope. Ads now float across your screen over the top of content, change size as your mouse moves over them, pop-up in new windows in front of and behind the window you are using.
Advertisers are also branching out into various delivery methods, sending ads via email, through RSS feeds, to mobile devices, embedding them in text, audio and video, and podcasts.
Some of the areas set to develop further in 2008 and beyond include social networking, web applications and widgets, mobile, in-game advertising and video marketing – each offering exciting new ways for brands to interact with their audiences.
Online, the line between editorial and advertisement has blurred even more than in print where the means to produce content is freely accessible to all. Blogging and citizen journalism has started a trend for content-rich websites which are, albeit simply promotional tools for a particular product, almost a product in themselves.
Buying and selling online advertising
Online ads can be bought in a number of ways - the main three are:
- Cost per Impression (CPM) where the advertiser pays for each showing (impression) of the advert on a website, priced per thousand impressions (M = roman numeral for a thousand). This is more expensive to the advertiser simplistically and is used for much of the display advertising you see.
- Cost per Click (CPC) also called Pay per Click (PPC) where the advertiser only pays if someone clicks on their advertisement, regardless of how many times it is displayed. Used extensively in sponsored search, the advertiser can tailor when their advert appears, against relevant 'keywords' or content. A problem with PPC advertising against search terms is what is known as 'click fraud' where rival companies click their competitors advertisements repeatedly to drive up their costs.
- Cost per Action/Acquisition (CPA) is used in affliate marketing. This is where the advertiser only pays commission if a user purchases something on their site, or perhaps goes a certain distance in a process, completing a registration form for example. This is simplistically cheapest for the advertiser - only paying for advertising that works, regardless of how much exposure they have been given or even how much intial response they achieved.
"Traditional" publishers / media companies whose online properties have developed from print brands normally sell advertising themselves in-house; quite often the print ad sales team has developed to sell online alongside the magazine and other brand extensions such as awards and exhibitions.
Pure online sales teams have been growing in size and number within the larger publishers though and more strikingly, many print versions of brands (consumer and business magazines) are being discontinued with content moving to be online only.
Smaller publishers tend to sell their online advertising inventory through advertising networks (larger publishers also use these for remnant inventory) - specialist companies who represent a collection of websites sold as a package to advertisers - either as a whole or in part. Advertisers may or may not be able to specify exactly which sites they will feature on.
Affiliate marketing, in the purest sense, is where one website is used to drive visitors to another. This is popular with online retailers, who often pay only when a visitor becomes a customer, but is under-used advertisers in other categories. This tends to be used a lot by small online publishers, bloggers and other amateur content producers for relatively little income. For a full explanation of affiliate marketing - see Wikipedia here.
*visit our glossary corner for a list of various places to help you fathom out all the online terminology!
Sources: The IAB / PwC Online Adspend Study
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