What is Online Advertising?
Online Advertising is all about advertising over the World Wide Web.
Online advertising can be broken down into a few key areas of interest. These areas of interest are not exclusively the only areas of online advertising available to you, however they represent the most popular items on the online advertising menu.
1. search advertising: 40% of the total spend last year. This relates to keyword based search engine optimization and paid advertising via pay per click campaigns. The three biggest sources of this type of advertising are Google, Yahoo, and MSN. There are plenty of additional smaller pay per click advertsing sources but the big three represent 98% of the market, so why do you really need any more. The beauty of search engines is that they make it so easy to purchase traffic, either directly from them or from their affiliate sites. In fact online advertising is now a question of click, setup, and pay. All you need to do is select the appropriate keyword(s) for your service offerings, select the geographic region you want to service and away you go. Note that search advertising is paid per visitor so if your ad is not clicked on you pay ZERO. Experts refer to this type of advertising as an outstanding deal. Even google will give you FREE processing for all the goods you sell online providing you are purchasing traffic from them and providing your ROI is less than or equal to 1,000 percent. Thanks Google!
2. display ads: 22% of the total spend last year. Banner or contextual advertising is still popular and is priced out on a cost per thousand impressions. Here you rent space on a web site and if you get lots of visitors to your site great since you pay for the space and not for the visitors. This is a risky way to advertise but there are plenty of places to get CPM deals and sometimes these deals work better than per visitor paid search advertising.
3. classified advertising: 18% of all spending last year or just over $3 billion dollars spent on classified advertising. So next time you say classifieds are not for your company or service offering you better think again. In terms of dollars spent last year classifieds came in at roughly half of the amount spent on keyword based search. Classified ads run at a cost per space and not for visitors directed to your website.
4. lead generation: 8% of all advertising spending last year, or over $1.35 billion dollars. It is interesting to see Google use lead generation in some cases since we all know Google is getting short changed on their paid advertising (per click), and you know what? All the search engines are getting short changed on their pay per click services. Don't be surprised if one day the search engines come out with a revenue sharing model for their high end PPC customers. That will be the day we all start purchasing search engine company stock. Is 500% ROI a normal rate of return for PPC advertising? We would argue that is a tiny bit one sided.
5. rich media: 7% of all spending last year or $1.183 billion dollars. This sort of relates to display ads, except that these ads are video targeted and most networks know that the targeting aspect alone will improve conversion rates. In advertising the better the targeting the higher value and the greater the advertising revenues. Could this be why Google bought youtube for over $1.5 billion dollars?
6. email: holding on at 2% of total online advertising last year. Hard to believe email advertising accounted for $338 million dollars in revenues last year. That is a lot of money spent on email advertising.
Why is search engine advertising important?
Online advertising expenditures are projected to grow into the tens of billions of dollars a month over the next few years, and this makes search engine advertising really important. With more and more people looking to purchase your goods and services online you need to try to get your goods and services in front of as many people as possible.
Technology experts predict that more and more people will access the Internet at a higher speed than ever before and this added speed makes getting audio or video news and information simple and fast. Video advertising will get increasingly popular as the cost of broadcasting that video over the Internet falls and as more and more people can see that video clearly (as a result of increasing access speeds). Online advertising via video feeds to your cellphone from live or recorded messages are only a moment away. Technology is moving so fast even the online advertising industry can barely come up with applications that meet the changing (and better) Internet technologies. The future of online advertising looks bright and very exciting to be sure. It is up to you to make sure you are part of it.
If you want to develop a nice web site you will need to be able to reach the people who are looking for your goods and services. And that means you need to get your site listed on the search engines. The power and simplicity of keyword based search behavior is an amazing phenomenon. People look to purchase goods and services that are closely related to their search queries. You provide accurate information that relates to their search queries. Some of those people find your web site and some find other web sites. Some will purchase your goods and services and most will go about their business searching for more items of interest to them. So if you want sales of your goods and services you need to find your prospective customers via keyword based online advertising, or via keyword based blogs, or via keyword based video blogs (like YouTube.com). The bottom line is that you need to get your goods and services in front of as many people as possible.
How can we be sure that online advertising works?
According to various market research sources, search engines outperform all other online advertising media in driving visitors to web sites. Moreover, consumers are five times more likely to purchase products after seeing search listings versus banner advertising. In fact, statistics show the following:
1) 77% of Internet users employ search engines more frequently than any other online media, surpassing banner ads, Web links, and e-mail links as the leading tool for discovering Web sites.
2) 84% of Internet users who are online four or more hours each day reported they use search engines frequently to discover Web sites and find products or services.
3) 55% of Internet users are more likely to purchase online after seeing search listings versus 9% for banner advertising.
Why do I want my web site listed prominently on a search engine?
Having your web site listed in a prominent position on a search engine is very important when you know recent findings on the habits of search engine users. Researchers at Pennsylvania State University found that:
1) 80% of users typically visit only the first three results from a search query.
2) 54% of the users views only one page of results in each session.
3) 19% went on to the second page, and less than.
4) 10% looked at the third page of results.
Why is online advertising so hot?
Seems that there are plenty of reasons why online advertising is on fire. Google's profits are going through the roof. The other major search engines are buying online advertising assets at a furious clip. Online advertising revenues are up 25% for the year 2008 compared to 2007. Click on the following link to read the latest news on online advertising spending for 2008. Now if that doesn't mean online advertising is hot then what does it mean?
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