Advertising was once a simple method dominated by huge and established companies. Media-buying and advertising agencies create print or TV ads and negotiate for space or airtime in TV or publications. However, digital advertising has brought home a new arena for advertising which is a lot more complicated, with more players and firms involved. This is the summary of an article written by Emily Steel, which looks at the history of online advertising and its unique characteristics. You can get the PDF of the behavioral targeting article here: Advertising’s Brave New World
While color TV was the largest advertisement innovation during the last 70 years, new firms are coming up to make ads for the Internet. There are internet sites for TV, magazines, etc, but majority of the internet is dominated by companies including Google and Yahoo. Internet marketing industry has grown a lot over the past few years, and has a considerable slice on the overall US advertising market. To capitalize on this, large companies, both from traditional advertising companies and online companies, bought or struck deals with major digital-ad companies.
Online advertising is precise
Online advertising is attractive because of its precision. At most, television ads are evaluated using a rough approximation before they are shown to a targeted audience. Criteria could for example be based on attributes such as gender; TV shows with mostly female audience are sent ads of products for females, or as the result of surveys. Most of the time, advertisers are never quite sure if their ads were successful in increasing sales. Online advertising, on the other hand, use the services of behavioral targeting companies such as Tacoda, to create targeted ads based on a consumer’s browsing habits. For example, if a person visits two car websites and then visits an unrelated site later, a car ad will appear on that site. The person will most likely respond to the website as can be seen by his previous browsing behavior.
Paid search
The most popular online advertising method, paid search, only requires advertisers to pay when a consumer clicks their ads. With this method, Yahoo and Google are the most popular, because they attract small businesses that can’t afford ad agencies. Furthermore, firms have helped these businesses make their own websites and apply search engine optimization so that these websites will show up at the top of the results lists on these search engines.
Other players in online advertising
More characters dominate other types of online advertising. Digital agencies design display ads and send them to websites through technology-motivated companies. A typical company buys ad space on a number of sites, lining up all that space with the help of ad networks such as AOL and Real Media. Ad-serving firms, such as DoubleClick and Atlas, also play a role; they deliver the online ads to the websites. Online advertising players also evaluate campaign effectiveness. Traditionally, this is done by audience surveys, but this is not as effective as what digital advertisers use. They use metrics based on number of ad clicks, time spent on ad, and what consumer does after seeing the ad. If something isn’t working, a simple click can help improve the process. This way, a lot of information is obtained regarding where advertisers put their money online.
