A company has to decide which forms of Internet advertising will be most cost effective in achieving advertising objectives. Banner ads are small, rectangular boxes containing text and perhaps a picture. Companies pay to place banner ads on relevant Web sites. The larger the audience reached, the more the placement will cost. Some banners on web sites are not paid for, but instead are accepted on a barter basis. In the early days of the Internet, viewers clicked on roughly 2 to 3% of the banner ads they saw, but that percentage quickly plummeted and advertisers began to explore other forms of communication.
Many companies get their name on the Internet by sponsoring special content on Web sites that carry news, financial information, and so on. Sponsorships are best placed in well targeted sites where they can offer relevant information or service. The sponsor pays for showing the content and in turn receives acknowledgement as the sponsor of that particular service on the web site.
A micro-site is a limited area on the Web managed and paid for by an external advertiser/company. Micro-sites are particularly relevant for companies selling low-interest products such as insurance. People rarely visit an insurance companyâ€™s Web site. However, the insurance company can create a micro-site on used car sites offers advice for buyers of used cars and at the same time a good insurance deal.
Interstitials are advertisements, often with video or animation that pop up between changes on a Web site. Ads for Johnson & Johnsonâ€™s Tylenol headache reliever pop up on brokersâ€™ Web sites whenever the stock market falls by 100 points or more. Because consumers found pop-up ads intrusive and distracting, many computer users such as AOL installed software to block these ads.
The hottest growth area has been search related ads. 35% of all searchers are reportedly for products or services. Search terms are used as a proxy for the consumerâ€™s consumption interest and relevant links to product or service offerings are listed along side the search results from Google, MSN, and Yahoo! Advertisers pay only if people click on the links. The cost per click depends on how high the link is ranked and the popularity of the keyword searched. Average click-through is about is about 2%, much more than comparable online ads. At an average of 35 cents, paid search is a lot cheaper than $1 per lead for Yellow Pages listings. One Samsung executive estimated that it was 50 times cheaper to reach 1,000 people online than on TV. The company now spends 10% of its advertising budget online. A newer trend, content target advertising links ads not to keywords but to the content of Web pages.
Companies can set up alliances and affiliate programs. When one Internet company works with another one, they end up advertising each other. AOL has created, many successful alliances with other companies Amazon has almost 1 million affiliates that post Amazon banners on their Web sites. Companies can also undertake guerrilla marketing actions to publicize the site and generate word of mouth. When Yahoo! started its Denmark site, it distributed apples at the busiest train station in Denmark with the message that in the next hours a trip to New York could be won on the Yahoo! site: It also managed to get this mentioned in Danish newspapers. Companies can offer to push content and ads to targeted audiences who agree to receive them and are presumably more interested in the product or product category.
Web advertising is showing double growth. Costs are reasonable compared with those of other advertising media. For example, ESPN.com (www.espn.com), the number one Internet sports site, attracts more than 5 million Web surfers a week. Based on current advertising rates, running advertising on the site for an entire year may range from $500,000 to $1,000,000 (depending on impression levels. Yahoo! employs 100 salespeople who demonstrate how online ads can reach people with certain interests or who live in specific zip codes.