Online advertising has experienced exponential growth outpacing that seen by the broadcast industry in the last six years. Internet advertising's growth has been coupled to the adoption of context-based advertising appearing alongside search engine results. As a result, new income streams were developed for both companies like Google, Yahoo, and Microsoft, as well as profit sharing for site owners and content producers.
History
1. Internet advertising started back in the late 1990's and early 2000's with banner and pop-up ads. Although each had similar successes, they did not provide the economic 'boom' many were expecting with the growth-rate of Internet use. In 2002, Google started providing context, or keyword-based text adds alongside site results and advertising revenues significantly increased. Google then deployed their Google AdWords marketing program which allowed advertisers to deploy low-end advertising campaigns without a lot of upfront expenditure. Yahoo and MSN have followed suit, though still lag significantly in the market-share that Google bit, by being first to the market with their advertising vehicles, which have enabled developers and business owners alike to deploy web-based commerce.
Significance
2. The expansion of on-line advertising provides a means to create financial streams of income from the Internet based on commerce sales. Created from methodologies previously used in print and other media advertising such as radio and television, companies are able to gain exposure across equivalent or greater audiences through Internet audiences for less up-front expenditure. This reduction in cost, while hurting traditional media giants, creates an environment where businesses can also earn money through providing arenas to display context-based advertising to incur revenue when viewers view ads and purchase goods from their websites.
Function
3. Online advertising's primary purpose is to promote products in the medium of the web to deliver marketing messages for customers. The ultimate goal is to make sales of merchandise or encourage the consumer to register for a service being offered by the advertiser. Theories of marketing, branding, and advertising remain basically unchanged; just that the act of advertising is occurring on the Internet.
Types
4. The three most common types of online advertising are Cost Per Impression (CPM), Cost Per Click(CPC), and Cost Per Action (CPA). CPM is when an advertiser pays for every 1000 views of their message to an audience. CPC is also commonly known as paying per click of the advertisement. The advertiser pays every time a viewer of the add clicks on the display and gets re-directed to the parent website. CPA is different, in that it is performance based and used often in affiliate marketing. In this scheme, the advertiser only pays for the users who complete transactions such as buying merchandise or registering for a service.
Potential
5. Google brought the concept to the forefront with Google AdWords and Adsense, however, there is significant room for growth in the industry. As the Internet continues to evolve in a more semantic-based context, the interface between advertisers to site deployers will continue to blur as industry looks to continue to increase profit while decreasing costs. Additionally, as more more media becomes web-based such as television, movie-rentals, and music, the means to expose greater number of consumers to advertiser's messages will only continue to increase.
About Internet Advertising
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