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There are two sides to ''online advertising'', a legitimate one and an illegitimate one. The legitimate side of ''online advertising'' includes Search Engine advertising, Advertising Network s and Opt-in E-mail Advertising . The illegitimate side is dominated by Spamming . Though the range of advertising options has expanded since in the commercialization of the Internet, the use of Rich Media and static images is extremely popular. The ever-increasing audience of online users will likely continue to be a major advertising market. OVERVIEW OF THE MARKET A significant number of firms, from small businesses to multinational corporations, incorporate online advertising into their marketing strategy. This is even true of firms which conduct their business through more traditional Brick And Mortar channels. In response to this demand, a number of firms specialize in facilitating online marketing. Therefore, online advertisements typically involve at least two separate firms: the advertiser or agency which purchases or sponsors the advertisement and the publisher or network which distributes the ad for display. Additional parties may also be included, such as an ad serving technology provider, a third party sales network, or other combinations. In capitalizing on the increasing importance of the Internet as a marketing medium, the online advertising industry has developed specialized technical systems to manage the ways ads are distributed and viewership totaled. The Internet Advertising Bureau (IAB) has established guidelines for the counting methodology, size requirements, and other aspects of the business. Because of the close relation between technical innovation and online advertising, many firms specialize in both. For example, most search engines couple their search service with an advertising program, exploiting the benefits of keyword-based search technology by including ads in search results. Many technology firms specialize in Ad Serving , the systems used to select the ads to show, optimize results, and generate reports. PAYMENT CONVENTIONS Because of the ability to track results of online advertising at a more granular level than what is available through traditional advertising, varying ways have developed for the advertisers and publishers to do business. The three most common ways in which online advertising is purchased are CPA , CPC , and CPM . CPA (Cost Per Action) 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 only pays for the media on the basis of the number of users who complete a transaction, such as a purchase or sign-up. CPC (Cost Per Click) advertising is also performance based and is common in search marketing, where it is often known as Pay Per Click (PPC). In this scheme, an advertisement may be displayed (and assumedly viewed) many times, but the advertiser only pays based on the number of user clicks. This system provides an incentive for publishers to target ads correctly (often by keyword), as the payment depends upon the ad not only being seen, but the viewer responding and following the hyperlink. CPM (Cost per Thousand) advertising is the most common basis in the business and is used for most Display Advertising and Rich Media . This scheme most closely resembles offline advertising, wherein the advertiser is paying for exposure of their message to a specific audience. CPM costs are priced per thousand, so that a $1 CPM, means that the advertiser pays $1 for every thousand impressions. RICH MEDIA ADVERTISING The display advertising portion of online advertising is increasingly dominated by rich media, generally using Macromedia Flash . Rich media advertising techniques make overt use of color, imagery, page layout, and other elements in order to attract the reader's attention. Some users might consider these ads as intrusive or obnoxious, because they can distract from the desired content of a webpage. Some examples of common rich media formats and the Terms Of Art used within the industry to describe them:
In addition, ads containing Streaming Video or Streaming Audio are becoming very popular with advertisers. EMAIL ADVERTISING Legitimate Email advertising is often known as Opt-in Email to distinguish it from Spam . AFFILIATE MARKETING Affiliate marketing is a form of advertising where the advertiser allows a potentially large number of small publishers to pick specific creative elements or offers to market in exchange for payment should such marketing create sales or other revenue. This is usually accomplished though a self-service online system, such as those offered by third parties Performics , BeFree , CommissionJunction , or Linkshare . Affiliate marketing was an early innovation of online retailer Amazon.com , which has used its program to generate enormous volumes of low cost brand exposure. Online affiliate marketing began as a natural outgrowth of the popularity of "linking" to other sites. In fact, it is a relatively safe and time-tested strategy for making money online. It is a network of online partners who refer business to your website. The simplest way is to simply introduce your visitors to the business opportunities products and services that they need and make money based on commissions from sales or a flat rate for referral. It does not matter whether you have a affiliate marketing website , that sells a product, or a website that has nothing to sell. But by adding online affiliate programs , you not only add value to your website, but also maximize potential revenue. Affiliate programs can be found listed at affiliate networks or affiliate directories For those not familiar with affiliate marketing, this link provides a breakdown on the common affiliate marketing lingo . Online affiliate programs began in the mid-1990's and are currently a popular way to earn money online. In fact, research shows that affiliate marketing is the most cost-effective way to generate online sales. Affiliate marketing, today, is the single fastest growth industry on the Internet. As per market statistics, affiliate marketing in terms of total sales generated mainly through the affiliate networks, was worth close to a billion in the UK alone, combining the figures for the last two years. This ofcourse is excluding white label and self-administered schemes. Besides, the affiliate solution providers confidently expect their own revenues to grow between 50%-75% in 2005-2006, and also confidently expect their own revenues to grow between 40%-75%. (Although these figures are unofficial and estimated, nonetheless, it is a lot of money!) Yet there are complaints. This is because many people go into this business without a solid recipe for success, and this severely hampers any efforts on Online affiliate marketing CONTEXTUAL ADVERTISING Many Advertising Network s display text-only ads that correspond to the keywords of an Internet search or to the content of the page on which the ad is shown. These ads are believed to have a greater chance of attracting a user, because they tend to share a similar context as the user's search query. For example, a search query for "flowers" might return an advertisement for a florist's website. Another newer technique is embedding keyword Hyperlinks in a webpage which are sponsored by an advertiser. When a user follows the link, they are sent to a sponsor's website. ADS AND MALWARE There is also class of advertising methods which may be considered unethical and perhaps even 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 labeled 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. Some programs are effectively Trojan s. These applications are commonly designed so as to be difficult to remove or uninstall. The ever-increasing audience of online users, many of which are not computer-savvy, frequently lack the knowledge and technical ability to protect themselves from these programs. OFFLINE ADVERTISING As online advertising has become more and more prevalent, and has taken a larger proportion of an advertiser's budget, the phrase, and concept of, offline advertising - i.e. any advertising not done online, has begun to some traction. The phrase is generally used in the context of a advertising campaign that takes place on the web and through other media, that is a "cross-media" campaign. SEE ALSO
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