Online advertising

When companies use the internet to place advertisments, this is called online advertising. Online advertising can take different forms:

• People may send special e-mail messages to advertise their product. This can be a more neutral newsletter, or it can be unwanted mail sent to many recipients. Such mails are called spam mails.
• People may use special graphics on other websites. When the user clicks on the graphic, he or she is directed to a website with more information.
• When a web page is accessed, it may open extra windows or tabs, which contain the offer. These windows or tabs may appear in front of the original site, or they may appear behind it.
• When people search for certain terms on a search engine, a given page may appear higher up in the listing of results.

Very often, companies personalize their offers. In the web browser, cookies are commonly used for this.

Types of Online Advertising:

1. Search Engine Advertising: This includes paid search advertising on platforms like Google Ads, where ads appear in search engine results pages (SERPs) when users enter specific keywords.
2. Display Advertising: Display ads are visual banners, images, or interactive media that appear on websites, apps, or social media platforms. They can be static or dynamic.
3. Video Advertising: Video ads are short video clips that play before, during, or after online video content, such as on YouTube or streaming platforms.
4. Social Media Advertising: Ads on platforms like Facebook, Instagram, Twitter, and LinkedIn allow advertisers to target users based on their profiles, interests, and behaviors.
5. Native Advertising: Native ads blend seamlessly with the content on the platform where they appear, making them less intrusive and more engaging.
6. Email Marketing: Email ads are sent directly to a user's inbox and can include newsletters, promotional offers, and personalized recommendations.
7. Affiliate Marketing: In this model, advertisers pay a commission to affiliates (publishers) for driving traffic or sales to their websites through affiliate links.

Benefits of Online Advertising:

1. Reach: Online advertising can reach a global audience, making it suitable for businesses of all sizes.
2. Targeting: Advertisers can precisely target their ads to specific demographics, interests, and behaviors, reducing wasted ad spend.
3. Measurability: Detailed analytics provide insights into ad performance, allowing advertisers to optimize campaigns in real-time.
4. Cost Control: Online advertising often offers flexible budgeting options, such as pay-per-click (PPC) or pay-per-impression (CPM), allowing advertisers to control costs.
5. Brand Visibility: Online advertising enhances brand visibility and can help businesses establish an online presence.

Challenges in Online Advertising:

1. Ad Blockers: Some users employ ad-blocking software, reducing the visibility of ads.
2. Ad Fraud: Advertisers must guard against fraudulent practices that can inflate costs or undermine campaign effectiveness.
3. Privacy Concerns: Stringent data privacy regulations (e.g., GDPR, CCPA) impact how user data can be collected and used for ad targeting.
4. Competition: The online advertising landscape is highly competitive, and rising costs can challenge advertisers with limited budgets.

Online Advertising Media

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  Advertising revenue as a percent of US GDP shows a rise in digital advertising since 1995 at the expense of print media.

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  An example of display advertising featuring geotargeting

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  Online advertising serving process – simple publisher case

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  The process of serving online advertising using an ad agency

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  Online advertising serving process using online bidding