Online advertising

What is Online Advertising?

Online advertising, simply put, is advertising on the Internet. The distinction between marketing and advertising lies in the existence of an "advert", which is the presentation of the advertiser's proposition on "media". The media is usually owned by a 3rd party, a media owner.

Offline adverts run anywhere from the newsagent's window, via the classified sections and the Yellow Pages, to press, radio and TV. They are the public face of marketing and for many people are synonymous with it.

Online adverts follow a similar path, although the media involved is different. The classified sector online is huge and includes local networks as well as the likes of eBay and Amazon, as well as numerous directories, including yell.com (the online yellow pages). The most widely recognised form of advertising is the placement of banner adverts (although banners are now only a small part of the inventory available), visually strong adverts placed on 3rd party websites; this activity is often treated as synonymous with online advertising. Other options include opt-in email, Instant Messenger, desktop (RSS) advertising. Then of course there is search engine advertising.

The "new" opportunity - Search Engine Advertising

Search engine advertising, or Pay Per Click (PPC), is the placement of text ads on a search engine's results page that appear when a user enters a search term that the advertiser "sponsors". From slow beginnings, in the last 3-4 years this form of advertising has grown massively and has been responsible for the resurgence of the Internet as an advertising channel. It now represents nearly 50% of the market and has been directly responsible for the huge growth of Google, the leading search engine.

For a more detailed look go to Pay per Click (PPC).

The rise of banner advertising

One of the strengths of the Internet as an advertising medium is the ability to track activity accurately (see Tracking & reporting). This has also proved to be a bit of an Achilles heel for banner advertising; the resulting measurability has made advertisers judge the success of campaigns based on direct results only, where offline campaigns are looked at in a more holistic way.

Online campaigns tended to be run on a direct response basis and their success was measured purely on the level of direct responses, which could be measured very accurately. This is undoubtedly a good way to measure a campaign's effectiveness, except that it ignores any indirect benefits. For example, people may have seen an online ad, but have decided to shop on the high street. They will also have taken on board the key branding messages, even if they didn't interact with the advert.

This meant that by ignoring the indirect benefits, online suffered by comparison in tests and advertisers were reluctant to put significant budgets online.

Brand benefits

This issue has been overcome more recently as advertisers have become more confident of the medium and grasped a better understanding of it's return. In particular brand advertising online has taken off, with many big brands putting significant proportions of their ad spend online. This is particularly true in the motor, travel and financial services sectors, but the big brands are starting to move online too.

Rich media

The growth of confidence in the medium has run in parallel with the increased use of rich media adverts. These allow a much greater creative freedom and can even compete directly with TV ads in terms of delivering a visual creative. Tie that with effective interactivity and excellent targetting and you have a very effective tool. So much so that recent reports state that rich media is the fastest growing advertising medium, out-performing PPC.

There is a bewildering selection of formats for rich media ads; interstitials, floating ads, expanding ads, wallpaper ads, pop-ups, pop-unders, video ads, map ads and mobile ads.