What is Online Advertising?
Online Advertising is all about advertising over the World Wide Web.
At it's core online advertising is all about targeting your offering to a specific audience. To put this thought into perspective all you have to do is consider the audience you are serving and the keywords that bring that audience to your web site. If you provide quality products and service offerings on a keyword by keyword basis your future patrons will have an easier time finding you from particular search queries. You have to explain how your goods and services relate to those keywords and why you can meet the needs of your prospective clients. The power and simplicity of keyword based search behavior is an amazing phenomenon. IF you are able to provide accurate information that relates to their search queries you sell more goods. If not, then these keyword based surfers shop elsewhere. It is that simple. Some search visitors to your website will purchase your goods and services and many will continue to look for a particular keyword based item of interest to them. It is up to you to catch their attention when they reach your web site. So if you want sales of your goods and services you need to find your prospective customers via keyword based online advertising, via keyword based videos, or via keyword based blogs. Once you have done that you need to bring those folks to a keyword based feature benefit proposition that explains why they are best served in buying your goods and services. This is the key to online advertising and this is why keyword based search traffic is the best traffic you can bring to a keyword based page on your web site.
Now from a general online advertising perspective we can divide the world of online advertising into a several specific advertising options. These options are not exclusively the only areas from which to choose, however they represent the most popular items within the online advertising menu. And they are:
1. search advertising: 50% 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 online search advertising options but these three are the best of the best and each one has a pay per click advertsing interface that is simple to use. Just in case you are wondering the big three search engines represent 98% of the entire search advertising market. Get it correct with the big three search engines and you are getting it right with 98% of your keyword based search audience. The great thing about search engines is that they make it so easy to purchase traffic. In fact online advertising has now become as easy as 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 represent, and away you go. Note that search advertising is paid per visitor so if your ad is not clicked on you pay nothing. How would you like to buy a billboard on the road that you only pay when someone calls you. Experts refer to this type of online advertising as an outstanding deal. Even google will give you free credit card processing for all the goods you sell online providing you are purchasing traffic from them and providing your ROI (return on investment) is less than or equal to 1,000 percent. Even Google thinks you should be able to make ten times your online advertising spend in total revenues. That says something right there.
2. display ads: 21% of the total online advertising 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. The trick is finding it.
3. classified advertising: 17% of all spending last year or just over $4 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 one third of the amount spent on keyword based search. Classified ads run at a cost per space and not for visitors directed to your website so again you are paying per thousand page impressions whether people click on your ad or not.
4. lead generation: 6% of all advertising spending last year, or over $1.4 billion dollars. It is interesting to see Google use lead generation in some cases since we all know Google is getting short end of the stick on their paid keyword based advertising (per click). How do we know that? Well if I am a company and I spend $1 to make $3 from traditional advertising (TV, radio, newspaper) and now I am spending money with Google to the tune of $1 for each $9 in revenues then it stands to reason that Google is getting the sorry end of the stick compared to the cost of traditional advertising. Some argue this is exactly why keyword based search advertising is destined to grow.
5. rich media: 4% of all spending last year or almost $1 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 $500 million dollars in revenues last year. That is a lot of money spent on email advertising.
Why is search online advertising valuable to you?
Search online advertising brings keyword based search traffic to your door. Keyword based search brings exactly your targeted audience to your ad message. For example if you are a Mercedes Catalytic Converter manufacturer and you want to sell your catalytic converters online you can go to google and bid on the keywords "catalytic converter" and on "mercedes catalytic converter". In your message on google you can specify that you are a manufacturer for Mercedes catalytic converters and by selecting these keywords you can target a specific market. The advantage to you in online advertising is that you target exactly the correct audience and you can track the results independently or through your favorite search engine. In fact Google offers a shopping cart for your processing that will only charge you if your total revenues are more than 10 X your spending on their keyword based search traffic. With more and more people looking to purchase goods and services online, yes even catalytic converters, you need to try to get your goods and services in front of as many people as possible. You need to find the folks who are looking to buy your goods and services. This is why search online advertising is the best tool at your disposal.
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. Keyword based 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). How neat would that be if we could see a video of the product or service before we actually bought it, or see the people behind the company that sell us that "catalytic converter". 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 understand the changes that are taking place and up to you to become part of the online advertising boom.
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 advertising media, surpassing banner ads, Web links, and e-mail links as the leading tool for discovering information about a product or service.
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 keyword search session.
3) 19% of the users view the second page of search engine results, and less than.
4) 10% looked at the third page of search engine results.
Why is online advertising so hot?
It 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 19% for the year (so far) 2008 compared to 2007. If you feel the same economic difficulties that we all feel now it is amazing to see that online advertising continues to grow while world wide advertising is shrinking. Thank goodness for the Olympics or else TV advertising revenues would be in a steep decline this year. Now if that doesn't mean online advertising is hot then what does it mean?
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