Anyone who has used the Web has seen advertising. It can be found on blogs, search results pages, and during videos, to name just a few.
It’s there because online advertising is big business. Let’s consider how it works for Mark whose small company needs a way to sell their new gadget - a heart rate monitor.
Mark’s target market includes runners and he needs a way to reach them. The simplest is to contact websites and blogs and ask about display advertising. For a fee, he may be able to display his ad on their website. The amount Mark pays is often based on the number of times his ad is seen. This is called CPM or Cost Per Mille – or 1000 impressions.
The website owner earns money from Mark and his company’s gadget is seen by potential customers - a win-win.
The same is true for Social Networks like Facebook. He can pay a fee to advertise for his website or his company’s Facebook page.
But there’s a lot more to online advertising. Mark could participate in a keyword advertising program like Google Adwords. Here, he pays a fee to have text ads appear alongside information that’s related to specific keywords that Mark chooses like “jogging”, “running” and “fitness”.
The adwords program means his ads can appear on websites, videos and in search results that are likely to appeal to his potential customers. But he’s not alone. The spaces for ads are auctioned off to the highest bidder online, so he may have to out-bid the competition to have his ads appear where he wants.
This type of system also gives website owners and video creators who participate in the program a way to earn advertising revenue. If someone click Mark’s ad, they earn a small fee. The Adwords system is a type of pay-per-click advertising.
Another option for Mark is affiliate marketing. This means working with individuals and organizations who promote products online using special, trackable URLs. For example, when a fitness coach blogs about running gadgets, she can use a special affiliate URL to link to Mark’s website. If people click the link or purchase the product, the blogger can earn a share of the purchase price.
Recently Mark noticed something strange. It seemed like wherever he went on the web, the same ads appeared for a website he visited recently. This is called remarketing. When he visited the original site, a cookie file was saved to his computer, as happens normally. Ad space across the web then uses the cookie to recognize him as a previous visitor and shows him ads for the original site. Mark could imagine his ads appearing in a similar way.
Through experimenting with a number of options, Mark learned a few valuable lessons. First, online advertising can take time and significant investment to work. Second, he only works with advertisers and affiliates he trusts with his brand.
Today Mark is focused on the right balance of having a good product, an understandable message and advertising resources that reach the people who need what he has to offer.
We see advertising everywhere online. Using an example of a small business, this video explains the major advertising models and how they work to build awareness for a new product. It teaches:
• Why advertising is so important to online commerce.
• The basics of display and pay-per-click advertising.
• How text and keyword-based advertising works.
• Remarketing: Why some ads seem to follow you on the web.
• How affiliate programs work.
• How to get the most out of advertising
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