The Different Types of Internet Advertising
With the advent of the Internet came the end of advertising as it had been done for decades. Measurement and targeting possibilities continue to evolve, helping to optimize marketing budgets and build sales. However, in this new era, advertisers have so many more options that it can be overwhelming. Following are the major types of Internet advertising available, along with advantages and challenges of each.
Banner ads were one of the earliest types of Internet advertising available. Basically, it consists of an image file that is connected to a website that offers more information or a way to buy what was advertised. So that traffic to the site from the banner ad can be tracked, often a special landing page is set up.
For example, the following banner ad encourages visitors to click and listen to a podcast:
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Banner ads can, technically, be any size. However, there are some common sizes that fit in most website layout schemes.
Because these ads need to load quickly when the website is launched in a browser, lower resolution (72 dpi) .JPEG/.JPG or .GIF files are used.
Banner ads can be purchased and placed in a variety of ways:
- House Ads. The website owner can place ads for the company's own products and services which link to other areas on the main or other web properties.
- Paid or Sponsored Ads. Advertisers or sponsors can pay to have a static placement on a website for a specified period of time. Sometimes this is sold as a sponsorship to support the costs of maintaining the website, e.g. a blog may be sponsored by a manufacturer.
Banner ads have lost some appeal since as the Internet continues to mature, more effective advertising methods have taken their place. But they will continue to be used in conjunction with pay per click and remarketing efforts (both discussed below).
Pay Per Click Advertising
One of the most significant types of Internet advertising is pay per click, usually referred to at PPC. Google is the dominant provider of PPC advertising on the Internet as of this writing. However, there are many other players who offer similar programs.
Used in conjunction with programs such as Google AdSense, a website owner (usually referred to as a "publisher") sets up a spot on a website to host PPC advertising. The spot can host either display banner ads or text only links. Google feeds the ads into the designated spot when the website is launched in a browser. The ad shown is based on either the website's market segment or visitor's interests.
On the flip side of the equation, advertisers pay for ads only when a visitor clicks on the ad on the publisher's website. Advertisers select keywords and topics relevant to their purpose that Google, in turn, uses to determine what ads to feed to various websites.
Google monitors the click activity and facilitates payments from the advertiser to the publisher, taking a portion of advertising revenues generated.
The advantages to both advertisers and publishers are significant. Advertisers save money by only paying for when visitors actually click on an ad. Because ads are fed based on interests of either the publisher's website or the visitor, advertisers can expand their presence on a myriad of websites without having to research and pay for each and every one of them. Publishers can generate revenue without having to solicit advertisers and sponsors. And the facilitating company, such as Google, gets paid, too. A win-win-win for all.
Challenges to the PPC model include imperfect targeting and keyword selection which can show irrelevant ads, especially when keywords can have multiple meanings. Additionally, in markets where there are many relevant keywords, it can become expensive for advertisers.
In addition to PPC ads appearing on websites, they can also appear on search engine results when users type in relevant keywords. As with PPC on websites, Google is the currently the dominant player in the search advertising arena with their AdWords program.
PPC search based ads, usually text with links, appear above and to the side of Internet search results. Those ads that appear higher on the page and on the first few results pages have a higher likelihood of being seen and clicked. But that can come at a very high price, sometimes even several dollars per click in cost to the advertiser.
In the early days of this advertising model, small businesses had a fighting chance to get traffic and sales from search advertising. However, as this area has become more competitive, prices per click are so high that only large companies can afford it. Luckily, Google and other search engines are getting more adept at serving up locally relevant results and ads, which can improve small businesses' search ad placement.
Google and other search engines are getting more and more sophisticated in tracking online behavior. This advancement has allowed for extended capabilities of PPC advertising on both websites and in search results.
When a user visits a site, a cookie (a code which tracks where the user has been) is created. If the user has visited a site as a result of clicking on a PPC ad, but does not take an action such as buying or subscribing, that behavior is noted. Then when the user visits other sites featuring PPC ads, an ad for that visited site will appear again. This is referred to as remarketing.
The downside is that users may see ads for the same company over and over again, regardless of whether they are truly interested in the offer or not. However, remarketing will become more accurate and effective as behavior tracking systems continue to evolve.
Similar to PPC, CPM advertising (CPM stands for "cost per thousand," where "M" stands for the Roman numeral for thousand) shows relevant ads based on either the subject of the website or visitor interests. Unlike PPC, cost to the advertiser and revenues to the publisher are based on the number of times the ad appears, also known as impressions. Price is set at a certain number of dollars per thousand impressions.
This may sound like it puts advertisers at a disadvantage since they will pay for traffic that may not click on the ads. However, to build brand name recognition, it can be very cost effective since it increases the number of impressions. Publishers also gain from getting paid for traffic regardless of click through behavior.
Disclaimer: Any examples used are for illustrative purposes only and do not suggest affiliation or endorsement. The author/publisher has used best efforts in preparation of this article. No representations or warranties for its contents, either expressed or implied, are offered or allowed and all parties disclaim any implied warranties of merchantability or fitness for your particular purpose. The advice, strategies and recommendations presented herein may not be suitable for you, your situation or business. Consult with a professional adviser where and when appropriate. The author/publisher shall not be liable for any loss of profit or any other damages, including but not limited to special, incidental, consequential, or other damages. So by reading and using this information, you accept this risk.
© 2013 Heidi Thorne