Everyone has seen some images, videos or what else about products and services on internet, but, Do you wonder how they get proftis?. Well this is called "Online Adverstising" also called online marketing or in some cases, Internet Adverstising, is a form of marketing and advertising which uses the Internet to deliver promotional messages to consumers. It includes email marketing (I hete it), search engine marketing (SEM), social media marketing (better known as a way to manipulate promotional information in a social network), many types of display advertising (including web banner advertising), and mobile advertising. Like other advertising media, online advertising frequently involves both a publisher, who integreates advertisements into its online content, and an advertiser, who provides ther advertisements to be desplayed on the publisher's content.
Other potential participants include advertising agencies who help generate and place the Ad copy, an Ad Server which technologically delivers the Ad and tracks statistics, and advertising affiliates who do independent promotional work for the advertiser.
In 2011, Internet advertising revenues in the United States surpassed those of cable television and nearly exceeded those of broadcast television. In 2013, Internet advertising revenues in the United States totaled $42.8 billion, a 17% increase over the $36.57 billion in revenues in 2012. U.S. internet ad revenue hit a historic high of $20.1 billion for the first half of 2013, up 18% over the same period in 2012. Online advertising is widely used across virtually all industry sectors.
Many common online advertising practices are controversial and increasingly subject to regulation. Online ad revenues may not adequately replace other publishers' revenue streams. Declining ad revenue has led some publishers to hide their content behind paywalls.
Compensation methods
Advertisers and publishers use a wide range of payment calculation methods. In 2012, advertisers calculated 32% of online advertising transactions on a cost-per-impression basis, 66% on customer performance (e.g. cost per click or cost per acquisition), and 2% on hybrids of impression and performance methods.
CPM (cost per mille)
Cost per mille, often abbreviated to CPM, means that advertisers pay for every thousand displays of their message to potential customers (mille is the Latin word for thousand). In the online context, ad displays are usually called "impressions." Definitions of an "impression" vary among publishers,and some impressions may not be charged because they don't represent a new exposure to an actual customer. Advertisers can use technologies such as web bugs to verify if an impression is actually delivered.
Publishers use a variety of techniques to increase page views, such as dividing content across multiple pages, repurposing someone else's content, using sensational titles, or publishing tabloid or sexual content.
CPM advertising is susceptible to "impression fraud,” and advertisers who want visitors to their sites may not find per-impression payments a good proxy for the results they desire.
CPC (cost per click)
CPC (Cost Per Click) or PPC (Pay per click) means advertisers pay each time a user clicks on the ad. CPC advertising works well when advertisers want visitors to their sites, but it's a less accurate measurement for advertisers looking to build brand awareness. CPC's market share has grown each year since its introduction, eclipsing CPM to dominate two-thirds of all online advertising compensation methods.
Like impressions, not all recorded clicks are valuable to advertisers. GoldSpot Media reported that up to 50% of clicks on static mobile banner ads are accidental and resulted in redirected visitors leaving the new site immediately.
CPE (cost per engagement)
Cost per engagement aims to track not just that an ad unit loaded on the page (i.e., an impression was served), but also that the viewer actually saw and/or interacted with the ad.
CPV (cost per view)
Cost per view video advertising. Both Google and TubeMogul endorsed this standardized CPV metric to the IAB's (Interactive Advertising Bureau) Digital Video Committee, and it's garnering a notable amount of industry support.
Other performance-based compensation
CPA (Cost Per Action or Cost Per Acquisition) or PPP (Pay Per Performance) advertising means the advertiser pays for the number of users who perform a desired activity, such as completing a purchase or filling out a registration form. Performance-based compensation can also incorporate revenue sharing, where publishers earn a percentage of the advertiser's profits made as a result of the ad. Performance-based compensation shifts the risk of failed advertising onto publishers.
Fixed cost
Fixed cost compensation means advertisers pay a fixed cost for delivery of ads online, usually over a specified time period, irrespective of the ad's visibility or users' response to it. One examples is CPD (cost per day) where advertisers pay a fixed cost for publishing an ad for a day irrespective of impressions served or clicks.
Benefits of online advertising
Cost
The low costs of electronic communication reduce the cost of displaying online advertisements compared to offline ads. Online advertising, and in particular social media, provides a low-cost means for advertisers to engage with large established communities. Advertising online offers better returns than in other media.
Measurability
Online advertisers can collect data on their ads' effectiveness, such as the size of the potential audience or actual audience response, how a visitor reached their advertisement, whether the advertisement resulted in a sale, and whether an ad actually loaded within a visitor's view. This helps online advertisers improve their ad campaigns over time.
Formatting
Advertisers have a wide variety of ways of presenting their promotional messages, including the ability to convey images, video, audio, and links. Unlike many offline ads, online ads also can be interactive. For example, some ads let users input queries or let users follow the advertiser on social media. Online ads can even incorporate games.
Targeting
Publishers can offer advertisers the ability to reach customizable and narrow market segments for targeted advertising. Online advertising may use geo-targeting to display relevant advertisements to the user's geography. Advertisers can customize each individual ad to a particular user based on the user's previous preferences. Advertisers can also track whether a visitor has already seen a particular ad in order to reduce unwanted repetitious exposures and provide adequate time gaps between exposures.
Coverage
Online advertising can reach nearly every global market, and online advertising influences offline sales.
Speed
Once ad design is complete, online ads can be deployed immediately. The delivery of online ads does not need to be linked to the publisher's publication schedule. Furthermore, online advertisers can modify or replace ad copy more rapidly than their offline counterparts.
