overview on online advertising

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ABSTRACT
Internet is a fast growing advertising medium. The expansion of internet-based
advertising is transforming the advertising business by providing more efficient methods of
matching advertisers and consumers. Today companies are inclined towards using internet to
reach out to more customers. For this purpose a large portion of companies marketing budget
is being allocated to online advertising. During the past decade traditional media firms are
taken over by the online media with traditional marketing and its strategies being side lined
by new marketing strategies. This paper reflects awareness and practices of current online
marketing strategies among new and existing firms.

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INTRODUCTION
During the past decade, the popularity of the Internet has been growing explosively.
The number of companies that create web presence to communicate with customers as well
as other firms has been dramatically increasing. Advertising delivered over the internet-
―online advertising‖-has become a significant source of revenue for web-based businesses.
Even before the Internet there were many different ways to advertise, in different media such
as radio, TV, newspapers, magazines, as well as via telemarketing or pamphlets. When the
Internet arose, a number of search options became available.
Companies had the option to advertise themselves on a larger scale. Usually the goal
of online advertising was to get a company- and/or product name, a statement etc.
communicated to as many people as possible for the smallest price possible. Thus marketing
has been redefined via the Internet, and given even small businesses a chance to promote and
brand their products on a larger scale. The Internet has therefore experienced enormous
growth in online advertising, since its inception in the early 1990‘ies.
After the dotcom collapse, the Internet was almost disregarded because of many
failing website-based businesses that had expectations to the market and assumptions about
consumers. However, both consumers and companies continued exploring online options.

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MARKETING
Marketing is a societal process, which recognizes consumer‘s wants, focusing on a
product or service to fulfil those wants, attempting to mould the consumers toward the
products or services offered. Indeed, marketing is fundamental to any businesses growth. The
marketing teams (marketers) are tasked to create consumer awareness of the products or
services through marketing techniques. Unless it pays due attention to its products and
services and consumers' demographics and desires, a business will not usually prosper over
time.
Viral marketing (a concept that has developed with the emergence of the Internet)
spreads through social relations, and is considered a modern version of word of mouth
marketing. Whether funny, surprising or with deep impact many small texts, pictures or even
videos are sent from one user to another for various reasons.
Advertisements during most of online advertising filled measured spaces on web
pages with variously sized banners, rectangles, buttons, or leader boards. In fact, a good
amount of early advertising industry work focused on defining such spaces, called
‗Interactive Marketing Units‘, in order to standardize practices for the sale and delivery of
paid advertising.

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EVOLUTION OF ONLINE ADVERTISING
Online advertising started in 1994 when Hotwired, a web magazine, sold a banner ad
to AT&T and displayed it on their web page. The ad was sold based on the number of
―impressions‖— individuals who saw the ad—which was the model followed by most
traditional media for this sort of brand advertising. Many web ads were subsequently sold
based on ―cost per mille‖, which is advertising terminology for cost per 1000 viewers of the
advertisement and often referred to as CPM.
Paying by number of viewers remained the norm until Procter & Gamble negotiated a
deal with Yahoo! in 1996 which compensated the web portal for ads based on the ―cost-per-
click‖ (commonly known as CPC). Yahoo! was paid only when a user clicked on the ad; this
was the web-version of the direct response method commonly used by advertisers for things
such as mail and telephone solicitations.
GoTo.com—which is now owned by Yahoo!—introduced many of the key
technological and business model innovations in the next three years (―GoTo to Overture,‖
2005; ―History of Pay Per Click, 2007). These included adopting the cost-per-click approach
to pricing and the use of auctions to allocate the advertising spots on the page showing results
of the search.

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ONLINE VERSUS OFFLINE ADVERTISING
The fundamental differences between online and traditional advertising result from a
combination of internet technologies and the nature of the web. The structure of online
communications makes it easy for publishers and ad networks to learn considerably more
about online users than has been possible with traditional media such as print, radio, and
television.
Online media or their ad networks typically know for certain from the internet
technologies for linking people to sites that an individual is viewing their site. That is very
different from a radio station, or a newspaper, which have limited ability to determine
whether a particular individual is listening or reading. Online media can often learn valuable
details about the individual that has signed on to the site. Each user has an IP (Internet
protocol) address which typically identifies the location of the individual down to at least the
zip code level.
People who browse from home and from smaller companies typically have a unique
IP address that remains the same over time. Using this address it is possible for online media
and advertising networks to track other sites that users with that IP address have visited and
to match up other details about the individual or household. (Some large companies change
the IP addresses of individual users frequently so that the address cannot identify the user
uniquely nor provide a precise geographic location. As a result online media cannot
determine much about people who browse from these companies). Print, radio and television
media generally do not know this level of information for individual users; cable systems
with set-top boxes also have specific information on viewers but do not have ready access to
the browsing behaviour of those individuals.
An implication of this observation is that there are economic incentives for
advertising and viewing to move online.
The Effects of Internet on the Traditional Markets
First, consumers and firms are conducting a substantial and rapidly increasing amount
of business on the Internet. Second, the market prefers the decentralized, many-to-many Web
for electronic commerce to the centralized, closed-access environments provided by the
online services. Third, the WWW represents the broader context within which other
hypermedia CMEs (Computer-mediated Environments) exist. Fourth, the Web provides an
efficient channel for advertising, marketing, and even distribution of certain goods and
information services.

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ADVERTISING
Advertising on search results pages
When you enter a search query using one of the commercial search engines, you will
often see the web page divided into up to three areas as shown in Figure 1. The left-hand side
of the screen displays the ―organic search results‖. These are based on an index of the world-
wide-web maintained by the search engine provider and selected based on algorithms that
rank their likely relevance to the search query term(s). The right-hand side of the screen
displays ―paid search results‖, which are listings sold by the search engine provider to
advertisers. The top-left-hand side of the screen above the organic search results may also
include paid search results for some search engines. A search query may generate a series of
pages of search results, and each page may have ads on the right-hand side if there have been
buyers for the space.
Figure 1. A search on Google shows the resulting webpage divided into three areas: 1) organic search results, 2) paid search results,
and 3) more paid search results.
Advertising on publisher websites
Search result pages provide a large amount of advertising inventory which is
primarily sold as text-based ads to advertisers. Many other web sites also supply advertising
inventory as a result of having attracted traffic through content other than search results. The
ad inventory on these websites is often called ―display‖ and often looks much like what one
sees in print media. Unlike the suppliers of ad inventory on search results pages, the suppliers
of display advertising inventory usually charge based on the cost-per-thousand viewers.

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HOW IS MARKETING CONDUCTED ONLINE
In general internet marketing is trying to promote both sales and communication, e.g.
Contact details, Product sales, Support possibilities, Aftersales options etc. So what are the
thoughts on marketing options online? How does one approach the consumer (visitor), and to
what extend do the visitor behave?
Banner ads
One of the most widely used forms of advertising online is that of the banner ad. The ad is
placed on a website, and usually highlights itself with different colours, size and motion. It
can be a punch line, a question or even a video. It has (as almost every other item online)
evolved with the discovery of newer tools and programs. In the beginning the banner was a
non-moving square with a text and/or picture, but today it is often a video that starts with a
mouse over. Therefore the banner ad can be compared to an outdoor communication form
that developed with the Internet.
Pop-ups
The pop-up is defined by a new page (of your current browser) opens on top of the one you
are currently visiting. There are several variations of the pop-up:
 The pop-under, opening a website under the one currently being visited.
 The pop-in; where something is blurred or covered at the visited website in order to
advertise for something.
Pop-ups can be designed to appear when a website is loading, after a period of time is spend
on a website, or upon leaving the site/closing the window. Pop-ups can appear as small
windows covering a portion of the host website, it can therefore be less intrusive, e.g. when
not covering a vital text or similar. The popup has been perceived as very annoying, and has
often been compared to that of advertising breaks on TV. Several pop-up killers have been
introduced online, and lately Microsoft has included such a killer in their very popular
Internet Explorer program. Some companies even have great success with pop-ups, designing
them as entertainment or small puzzles.
Email/Newsletters
Email is a very simple way of reaching the customers. It has however been misused,
and most users of the Internet are very familiar with the concept of Spam. Less serious
companies and advertisers buy email addresses by the hundreds and send out ads. Many
websites that ask for details on the visitor, and thus require an email address, and often ask to

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be allowed to send out regular newsletters. These newsletters are a good way to keep visitors
returning to the site.
The herd-behaviour
The Internet reaches the globe in seconds. Therefore a successful site such as facebook.com
has millions of users. The question is, however, if the site is successful because it has a
product millions of users wants, or if the site is just popular because of herd-behaviour. The
publishing was based on online auctions, but it is relevant to marketing as well. The results
were that a parameter such as price might create herd behaviour, even though other auctions
(sites/services) might be similar.
The herd behaviour can be compared to viral marketing. If the message is interesting to large
numbers of people, it will be watched by even more people.
Traditional Options New Options Advantages and disadvantages
Banner ads Chat functions
Whether it is with pre or post
sales, the consumer is now in
contact with the
manufacturer/retailer.
Pop-ups Consumer feedback
Both manually (surveys) and
mechanical (how did the visitor
end up on our site), the data can
be used to further optimise the
marketing plan.
Possible to drown in data, and
thus get nowhere.
Emails Marketing communication
More segments can be created and
messages can be customised to fit
even small groups based on their
interests. Less structure with
many segments.

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HOW MARKETERS ARE USING SOCIAL MEDIA TO GROW THEIR
BUSINESSES
What is Social Media Marketing?
Social media marketing is the marketing strategies that smart businesses are
employing in order to be a part of a network of people online. Just as friends gather in public
pubs, coffee shops, or barber shops, groups of people are gathered and connected through
various online tools and websites. These people rely on their online network of friends for
advice, sharing, and socializing.
Many different styles of online communities have surfaced over the years. However,
within the last few years, newly created communities are offering more rich interaction.
These marketing strategies allow conversation, connection, and a sense of community among
its members.
The social media era was started around ten years ago. It began with LinkedIn, which
was launched in 2003, followed by MySpace and Facebook in 2004, YouTube in 2005, and
Twitter in 2006. In less than a decade, its population has grown rapidly, and it has reached
billions of people worldwide. The popularity of social media sites has also spread to
companies and firms as part of their strategies. More and more companies are becoming
actively involved in social media, which also shows the emerging of social media sites as the
new marketing/promotion platform that is also known as social media marketing.
A number of businesses have gained some advantages from social media marketing.
For example, Dessert Gallery has increased visits by 20% per month after its Facebook fans
jumped from 283 to 817 .In addition; a Facebook page with a portfolio of pictures has helped
a wedding photographer from Michigan, Aaron Deckrow, get new customers . In addition,
social media sites have enabled businesses to build closer relationships with their customers,
as well as to expand the market to the customers that they could not reach before.
Integration with other marketing platforms
Some managers are worried that their social media campaign can affect the number of their
main website‘s visitors, because more and more customers switch to Facebook or Twitter. If
the social media program is done correctly, website‘s visitors will not be affected by the
growth of companies‘ fans/followers in the social media sites. This is because in the end

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customers should be directed to the company‘s main website. As a result social media
marketing becomes the medium to increase the website‘s traffic as well as the company‘s e-
commerce. For instance, Starbucks‘ web traffic has stayed steady regardless of its 12.7
million (and counting) Facebook fans. In addition, to avoid the cannibalization between
company‘s media platforms, companies should differentiate the features that they offer on
each media.
Along with changes in the marketing approach from product-centric to customer-
centric approach, selling and promotional approach has also changed. A research shows that
―most successful salespeople, over two-thirds believe social media is integral to their sales
success‖, because social media has enabled marketers to engage with customers along their
buying process. From the Twitter/revenue analysis, AT&T did a good job on combining
some its marketing platform in its Twitter account. AT&T has utilized its Twitter account as
an additional tool to answer any questions from its customers regarding AT&T‘s services as
well as to handle some complains for its customers/followers (e.g. customer service and
customer support), which clearly has increased the quality of its customer service department
and its customer satisfaction.
By combining traditional and social media platforms, it allows businesses to extend
their conversations about the products with its consumers. In addition, managers should
develop a strategy that allows all platforms to work together to continue the conversations,
and to connect with the customers. Social media measurement (SMM) measurement should
include consumers‘ interactions and reactions as one of the variables on the calculation,
because after all SMM main focus is conversion, which means how well consumers‘
involvements on the social media sites affect their buying decisions. SMM measurement is
more complex than the traditional platforms due to the ―human interactions‖ variable.
There are two different methods to measure SMM effectiveness. Firstly, by tracking
the company‘s sales directly from any promotional codes/links that are provided exclusively
through company‘s social media sites. In addition, the firms can also create a special landing
page for its unique promotion and embed the hyperlink to its social media channels. By doing
so, the page will capture any customers‘ purchases from that particular page, and also help
the firm to define its sales volume, Total profit (or loss) estimated to result from an on-going
business relationship with a customer over the life of relationship. By embedding the link of
his product on amazon.com to his social media sites.

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ROI= (gain from investment- cost of investment): cost of investment
However, this method fails to capture the non-financial outcomes of the campaign such as
changes in the brand‘s positive/negative sentiments, changes in brand mentions, which are
the other key variables of SMM measurement.
Social Media Marketing Target Market
Target market is one of the critical factors that could affect the effectiveness of a marketing
strategy. Similarly, it is important for marketers to recognize the characteristics of social
media marketing target market to ensure the effectiveness of their campaigns.

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NEW STRATEGY
The traditional view of marketing assumes that an organisation should start with its
customers, learn their needs, and then try to fill those needs - profitably and on an on-going
basis. Marketing, as it has evolved over the past half-century, has not been developed to
satisfy customer wants and needs. Instead, in too many cases, it has been used to assist
companies in disposing of products and services they have manufactured, created, developed,
or simply wanted to vend at a profit. As a result, most marketing concepts and techniques
have focused almost exclusively on new customer acquisition and on generating profitable
transactions through cross-selling and up selling, rather than on building long-term
relationships with customers over time.
The market changed from the historic ―marketer in control‖ to ―retailer in control.‖
Today, we argue it is now ―customer in control.‖ Customers now have a wide variety of
choices from a wide variety of suppliers with a multitude of retail choices among a broad set
of products and services that are pretty much alike. Most products and services today are
being sold at continuously declining prices or at least at continuously declining margins to the
marketing organizations.
Many companies today have a customer focus (or customer orientation). This implies
that the company focuses its activities and products on consumer demands. Generally there
are three ways of doing this: the customer-driven approach, the sense of identifying market
changes and the product innovation approach.
In the consumer-driven approach, consumer wants are the drivers of all strategic
marketing decisions. No strategy is pursued until it passes the test of consumer research.
Every aspect of a market offering, including the nature of the product itself, is driven by the
needs of potential consumers. The starting point is always the consumer. The rationale for
this approach is that there is no point spending R&D funds developing products that people
will not buy. History attests to many products that were commercial failures in spite of being
technological breakthroughs.

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ARE THE COMPANIES AWARE
The companies
Since the emergence of the Internet, companies were quick to adopt the fast communication
methods it provided. E-mail is today as common as phones, and many business details are
often confirmed via email, even after being discussed and agreed over the phone. Most
companies advertise for themselves via websites that cover all bases such as products and
services, job opportunities, company history, press material and news. Some even state their
mission and vision statements online, and enhance their attitude towards specific subjects,
such as environment and pollution, employee satisfaction and well-being.
Every website searched and analysed also showed options for contacting the company,
typically both with physical address and phone number of their main complex, as well as an
E-mail or contact form.
Marketing as a service
After an initial visit, the site often remembers your choice even when visiting the
.com address. This service allow the companies the possibility of create sites with different
languages and thus differentiate the site with regard to local customs, contact details etc.
Physical contact details are easy to find, and every site had email or contact form in order to
contact the company online. However none of the sites searches provided much information
on board members, key personnel or specialists. Therefore a potential business partner or
customer would have to use the old fashioned ways of communication to find and talk to
whoever is needed.
Advertising on demand
Information should be available when it is requested. Search engines have provided
users with powerful options for finding precisely what they are looking for. Newspapers have
for years kept their articles in databases that can be searched as a subscriber. Old products
and/or brands can be remembered, even requested. Some websites also offer login to their
visitors, corporate login. Login, or even better the use of cookies could also allow sites to be
customised for each individual visitor. That way, a visitor who primarily are looking for job
opportunities could this way, have the companies job-section open when visiting the site. On
demand also requires that the website is up and running every hour of every day.

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CONCLUSION
The Internet is playing a more and more important role in the field of marketing.
Advertisers once had only crude methods available for targeting their ads to consumers who
were likely to buy their products. That was done mainly by selecting advertising media –
such as particular television shows or magazines – that specialized in the relevant audiences.
Advertisers also had little information on who actually watched their ads and what activities
followed. The Internet has changed that by allowing advertisers to target specific individuals
and pay only when those individuals click on the ads. More sophisticated technologies are
beginning to track not only whether individuals clicked on an ad but whether that actually
translated into a sale.
Search-based advertising has developed the most advanced methods for targeting
consumers and charging for results. Display based advertising is catching up. And the social
media sites is a vital element for the online business It is an art of producing traffic to site for
generating business through online social group. It is simple and low cost way to increase in
sale and to bring traffic to the website.Web-based businesses are providing more content and
services that people want to spend time viewing. The ad platforms have business models that
are based on collecting and hoarding highly personal data from individuals. The implications
of that have not been fully thought through by either consumers or policymakers.
Twenty years ago, it was the age of mass media, one-way massive broadcast, massive
budgets, and not so massive ROI analysis. If you happen to be dissatisfied with a company‘s
product or business practices, you‘d probably stop buying from them and might write an
angry letter. You might even tell your family and friends not to patronize that business. But
that was then; the game has changed. Media is becoming more personal and the ROI is now a
common requisite in advertising budgets. If you are angry with a company, product,
personality the tools are there and the world is waiting to listen. The only limit is our
creativity and how far we want to go.

overview on online advertising

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