Something which is still in its infancy in the grand scheme of things, advertising on the internet has been and will continue to be a growth sector in the advertising industry as consumers spend an increasing amount of their time online.

The web is already one of the world’s largest marketplaces and as any advertising or marketing professional can tell you, the way to reach consumers is to go to them. And that place is ever more likely to be the internet, making bringing advertising to the internet an essential to any business which hopes to remain competitive.

Not only consumers but businesses have moved much of their commercial activity to the online world, making this also a new area of growth for business to business marketing as well as business to consumer advertising. While advertising on the internet is still an emerging part of the marketing world, there are already a variety of means which advertisers can employ in their efforts to make headway with online consumers.

Advertising banners and text ads are the most well established form of advertising on the internet, with PPC, PPA and other forms of contextual advertising becoming a growing part of web based marketing efforts. The cost of advertising to the advertiser can be determined in several different ways, depending on the pricing model used.

There is the pay per click (PPC) model, which relies on gathering a large number of tricks to be useful to the advertiser and profitable for the seller of online ad space. Other advertising sellers prefer the CPM model, which involves a flat fee per 1,000 impressions something which works well for companies who have high levels of traffic selling advertising on the internet.

There is also the CPA or cost per action model; these actions could be clicks, impressions or anything else determined by the advertiser and the advertising seller. However, the most common action in this model is something which helps the advertiser to build their list such as an email-based subscription.

Adverts used in internet marketing campaigns involving newsletters, a popular choice in the field of B2B advertising on the internet are often priced this way. CPA advertising tends to be more expensive for the advertiser, but it does yield much more certain results and in the case of B2B advertising, the return on investment tends to be higher. Newsletters are a favored method for business to business campaigns because of the repeated contacts generally needed to close a sale and because for these sorts of applications, banner and text ads tend to be far less effective.

When using banner ads, the placement and design must be taken into account by both parties; different ads will benefit from different placement on the page; website owners selling advertising on the internet should have the behavior of their visitors analyzed to determine favorable placements. This helps the publisher do a better job of selling advertising, as well as making the decision an easier one for the advertiser.

There is always the option of pop-up ads to give advertisers increased visibility. At one time, this was a near-guarantee of an impression, but these are becoming less popular with the increasing sophistication of pop-up blockers. Advertisers and sellers of advertising on the internet have a lot of choices and as web technology grows, the opportunities for advertising are sure to grow alongside of it.

Selling advertising is something which while similar in aim to any other kind of sales, calls for an entirely different type of approach.

Advertising sales is an intensely competitive field, especially given the enormous number of potential advertising venues available to companies today. As a publisher or owner of any form of media suitable for advertising, you have a number of challenges which must be dealt with in order to successfully; and even more importantly, profitably sell advertisers space in your media.

One of these challenges faced by publishers as they seek to begin or optimize their returns on advertising sales is to convey the benefits to be had by advertising with their particular media outlet. You have to have an in-depth understanding of the advantages of the type of media you are selling advertising in and convincing potential advertisers that your media and in particular, your publication or other venue is ideally suited to reaching their target market.

The right approach to take to advertising sales is largely dependent on the kind of advertising opportunities you have to sell. If you are selling outdoor advertising, it calls for a different set of tactics than if you were selling advertising space in a print publication or on the web. It bears repeating that you have to know your media and know it inside out if you hope to be a success in advertising sales.

You should always ask a potential advertiser what media they currently advertise in and how well it is performing for them. This allows you an opening to suggest ways that your advertising opportunity would be an ideal complement (if their current campaigns are doing well) or alternately, a much more profitable replacement in the event that they are unhappy with the results from their current advertising efforts.

Advertising sales requires an understanding of the customer’s needs and motivations, as well as of your media.

The way to make successful and lucrative advertising sales is to provide the customer with a perception of added value. This means positioning your advertising space as a product which is desirable and serves as a solution to the needs of the potential advertiser. You’ll also need to be prepared to be flexible in order to remain abreast of the competition and always maintain good client relations. If you’re not communicating with your advertisers regularly, you can be sure that someone else is!

Advertising sales can be quite a challenging proposition, which is why many publishers and media owners opt to engage the services of professional advertising sales consultants. This keeps the company’s risk low and the return on investment high. Most importantly of all, using a freelance advertising sales service allows media owners to concentrate on the operations of their business, ensuring continued growth and profitability.

In essence, PPC advertising is all about bidding for the top or leading position on search engine results and listings. Advertisers do this by buying or bidding on keyword phrases that are relevant to their products or services – the higher the bid, the higher the spot on the search results, the more the people will find the ad (and click on it) to go to their websites. Advertisers would then pay the bidding price every time a visitor clicks through the website.

PPC advertising is also known under the following names/variations:

• Pay per placement

• Pay per performance

• Pay per ranking

• Pay per position

• Cost per click (CPC)

Here are the benefits of PPC advertising are:

1. With PPC advertising you need not be a genius in computer and technology to be able to run this ad campaign.

2. PPC Advertising make immediate results are seen after a few days.

3. No need to make a website conform to the SEO rules.

4. Nothing to lose even if you do not top the pages of different search engines. You can still always choose PPC advertising.

5. You can make use any PPC advertising search engine available.

6. With PPC Advertising you can type in any keyword you like.

How exactly PPC advertising can increase traffic, leads and sales?

Pre-qualified traffic. PPC advertising leads your customers to you for a lesser cost.

Instant exposure, immediate profits. PPC advertising search engines enable you to get your desired results fast.

Consistent top listings. This is to get your website on top of the sponsored search results for free.

PPC advertising enables advertisers to control their advertising campaigns. Advertisers have effectively targeted their audience and set their own price per click. PPC advertising networks provide the platform to identify the desired audience by geographic setting, topic and industry.

Tools are provided by the networks to check how the pay per click limit is working for a certain advertiser. Of course, if the advertiser made the highest bid, the better chances the ad will be seen in the search engine. These networks too provide protection for the advertisers against click fraud. This advertising set-up allows advertisers to set a daily budget for his ads, thus, less spending for unnecessary clicks. Advertiser will never go over his budget.

In PPC advertising, what are important are the keywords and phrases. Then, write the ad creatively but straightforward. Good thing if your product or service will not disappoint those that are relying on your ad’s promise – but what if it did otherwise?

More and more advertisers have been using PPC advertising and it will continue to grow faster than any online advertising techniques. From revenues of $2.6 billion in 2004 to $5.5 billion in 2009, cost per click will dramatically go up as well from $0.29 to $0.36.

PPC advertising is new in online marketing and it is going to continue in the years to come. For advertisers, this means increase revenues with fewer advertising expenses, savings, more sales, good return of investment (ROI) and effective ad campaigns in the days to come.

The small villages and towns that ones thought to be just a dot on the map are attracting attention of MNC’s .Television advertising which still holds a major share in spite the growth of internet and other media is the most leisure and preferred activity and so every ones first choice is still the television advertising.

Newspaper advertising is one of the most common forms of print advertising which has been effective for small businesses as well as services which targets the community through readership and circulation. The main disadvantage is that it gets cluttered and gets lost with the competitors ads. Magazine is a better form of print advertising as the readers are in a relaxed state of mind ,they can even save your ad and return as many times as they wish, to your printed ad.

In airport advertising the viewer ship has no escape route which is focused and compelling too has diverse target consumers from corporate leaders to decision makers that makes it the most interesting and challenging platform all over the world. New concepts and advanced design technology has changed the airport environment. Airport advertising has increased the airport revenue apart from aviation.

As the consumer steps out of his home or office their strikes outdoor advertising scooping off with its targeted messages. Outdoor advertising needs a low budget with small crew to start with, it has a quick response, reminds too often about their service. Mobile billboard trucks provide flexibility of location and time, even on traffic jams and remote parts of the town.

If radio advertising does not reach its target audience than it’s of now use, it still appeals a large audience even other media options available. It creates a lasting impression as its played repeatedly over specific time period but it is difficult to reach the target audience who does not listen to radio that is a major disadvantage attached to it. Radio advertising has greater return on investment as it reaches the right people at right time with right message at right cost.

As the consumers are getting more and more aware of different products and businesses worldwide, the advertiser has to be a step ahead anytime –anywhere. For more information about us visit this site: www.worldwideadvertisingnetwork.com

Tags: Advertising, Airport Advertising, Outdoor Advertising, Print Advertising, Television Advertising, Radio Advertising, Advertising Network, Internet Advertising, Mobile Advertising, Worldwide Advertising, Media

Reality is that marketing a website business is a need ever present to its owners. To promote the business has to be attended to with the firmest of the dedications.

Website advertising can’t be considered an exact science but is definitely a very effective engine accomplishing the growth and expansion of any home based internet business.

Even so online entrepreneurs still and categorically declare that advertising a website is still a dangerous venture and at its best a speculation, even under the most favorable of conditions. Millions of dollars are spent yearly in website advertising budgets with no more realistic return on investment than would outcome from throwing away these advertising dollars into the vast ocean. They of course, are not suggesting that it is uncertain as to real efficiency of the right type of advertising, but that just about every online advertiser relates to the fact that sooner or later, sometimes constantly, costly mistakes are going to be committed.

There has been for many years a rank skepticism as to the best methods of promoting, sustaining and building up a small internet business.

 In this day of sensation and accomplishment this skepticism is being overthrown and well established, demonstrable facts are taking its place. Previously most business entrepreneurs thought that advertising was of little value in the development of doing business. Perhaps the kind of advertising our fathers did was of little value but there is a vast difference between the advertising of twenty five years ago and that of today. Online business advertising has changed and advanced so quickly through its various modifications that even modern vocabulary has problems keeping up and terminology is almost out of date in its attempts to describe it. In no field of endeavor has there been such development as in the online advertising campaign field.

Website advertising is, perhaps, the most valuable factor in establishing, maintaining and building up a home based internet business.

Internet advertising is today the ideal of modern publicity. It has the endorsement of the leading merchants, manufacturers and internet entrepreneurs who are acquainted with its merits.
They are fast realizing from experience, that advertising their website online gives them the safest, least expensive and most productive of results. They have found that there is little of the speculative in online advertising campaigns when it’s well done. Within a short time it is alleged that internet advertising will even overtake TV advertising, and it will be regarded as indispensable for success of any small business enterprise as the invested capital itself.  

This conclusion has been arrived at after most critical tests. It is based on facts as they exist today. It follows, then:  

That website advertising makes you well and favorably known.
That it gives you a better and wider publicity in the area in which you are seeking to do business with superior return on investment than all other combined.
That it gives to the advertiser the confidence it has won from the people through long years of service.
That it affords the best and least expensive way of putting your advertisements into millions of monitors and screens worldwide.
This being true, it seems there is no logical reason why every home based internet business entrepreneur should not use an online advertising campaign for obtaining the results he desires. The time has come when the old and ineffective custom of doing business must be discarded.

There is no time today to wait for the “ducks to swim to the shore”.
You must wade in or sail out and get them. Website advertising is the one effective, unerring gun with which you can bag your game. Undoubtedly an online advertising campaign can be successfully accomplished.

Copyright © F. Prida. All Rights Reserved.

In essence, Pay Per Click Search Engine Advertising (Ppc Online Advertising) is all about bidding for the top or leading position on search engine results and listings. PPC advertisers do this by buying or bidding on keyword phrases that are relevant to their products or services – the higher the bid, the higher the spot on the search results, the more the people will find the ad (and click on it) to go to their websites (this is why some people call it “keyword auctioning” or “keyword bidding”). PPC advertisers would then pay the bidding price every time a visitor clicks through the website.

Pay Per Click Search Engine Advertising (Ppc Online Advertising) is also known under the following names/variations:

- Pay per placement

- Pay per performance

- Pay per ranking

- Pay per position

- Cost per click (CPC)

Pay Per Click Search Engine Advertising (Ppc Online Advertising) is usually done with the following standard procedures:

1. Setting up an account and/or deposit funds.

2. Creating a relevancy keyword list.

3. Choosing (and setting up) an account with a PPC search engine.

4. Bidding on the ad placement, including the search result words or phrases.

5. Writing out an ad copy.

6. Setting up the ‘landing pages’ for your ads.

7. Placing the advertisement in the search engine.

There are many benefits to Pay Per Click Search Engine Advertising (Ppc Online Advertising), making it an effective way of advertising your own business ‘online’. Personally, I believe that Pay Per Click Search Engine Advertising (Ppc Online Advertising) is one of the most effective way to promote the NEW online business. You can drive laser-targeted traffic to your website and start advertising online & increasing your business’ reputation dramatically.

READ THIS: If you are interested in Pay Per Click Search Engine Advertising (Ppc Online Advertising) and how to make big money online at home through search engines. You’ll discover the benefits of Pay Per Click Search Engine Advertising (Ppc Online Advertising) below:

- Get launched immediately. PPC advertisements are implemented very quickly – they can go ‘online’ within an hour after winning the bid and paying for it.

- Obtain specific, pre-qualified, and quality traffic. Pay Per Click Search Engine Advertising (Ppc Online Advertising) provides you with a quality or a well-targeted traffic. Visitors are narrowed down into ‘qualified’ people who are actually looking for specific products and/or services that you offer – those who are more likely to become a ‘lead’ (a convert) and complete a transaction (either by buying your product or subscribing to the service that you are offering.

- Widen your reach. Pay Per Click Search Engine Advertising (Ppc Online Advertising) provides additional traffic to your website, aside from the natural or “organic” search engines.

- Track your ROI investment. Pay Per Click Search Engine Advertising (Ppc Online Advertising) makes use of a tracking system that will determine exactly who comes to the website and what they do once they arrive – the length of their stay on the site and the number of pages (including the actual pages) that they view. These are valuable tools in determining statistics such as return on investment (ROI), acquisition cost-per-visitor, and conversion rates (the percentage of visitors who are converted into customers or leads).

My experiences reveal that you have to know what you are doing with Pay Per Click Search Engine Advertising (Ppc Online Advertising). Without the appropriate knowledge and marketing strategy, you are losing big money from your pocket.

Keep reading this article, if you are interested in Pay Per Click Search Engine Advertising (Ppc Online Advertising) and are looking for the significant things to consider while you are creating your own Ppc Online Advertising campaign.

Below are some important things to consider when planning on Ppc Online Advertising campaign. You’ll discover my recommended 7 easy tips to create your profitable PPC online advertising campaign and make big money through Pay Per Click Search Engine Advertising (Ppc).

1. Know your product very well. Take an inventory of the product and/or services that you have to offer (before anything else).

2. Stay within the budget. Determine your daily or monthly budget; and stay with it. This means keeping your budget in mind, avoiding bidding wars if possible.

3. Bid just right. Know how to bid right effectively – a bid that is too high can exhaust all of your money, while a bid that is too low can make you lose that spot.

4. Watch the bottom line. Measure your profit margin against your spending or expenses. Know when to stop and terminate your Ppc Online Advertising campaign – if you spend more on advertising but have little or no sales at all.

5. Find the right targeted keywords. Decide which keyword phrases to opt and bid for. Do some effective keyword research, either by actually looking at existing search terms or with the use of online keyword suggestion tools, to know which terms are mostly used when searching for items that are related to your business. Focus on specific keywords, not on general ones.

6. Write effective ads. A good PPC ad is that which can persuade and move a searcher. There are several approaches to this:

- Discount offers

- Testimonials

- Celebrity/famous endorsers

- Money-back guarantees

- Free trials or sample offers

- Freebies

- Reverse psychology

- Major benefits (“Lose weight”)

- Direct instructions (“Click here”)

7. Maintain a high quality & professional-looking website. Your web content should be regularly updated and checked for spelling and grammatical errors. There should be no broken links or images. The website should be simple – designed in such a way that it will be easy for visitors to navigate and load. Include contact details to create a good impression among potential customers.

My bottom line is that if you’re done your own Ppc Online Advertising campaign properly, Pay Per Click Search Engine Advertising (Ppc Online Advertising) can be an effective marketing tool that will maximize the return on your investment. Also, you can make big money online at home through your Ppc Online Advertising campaign.

Learn More About Pay Per Click Search Engine Advertising (Ppc Online Advertising) at: http://www.iPayByClick.com. You’ll find everything you have to know for building your profitable PPC online advertising campaigns. Also, you will learn how to become a super and success PPC advertiser on the website.

READ THIS: If you are looking for the most effective reputable ways to make money online from home. This is a real home based business opportunity for internet entrepreneurs to earn big money online at home.

Internet marketing online advertising PPC search engine advertising is by far the most affordable form of advertising available. Internet marketing online advertising PPC search engine advertising is a flourishing business that by 2008 is expected to reach $8 billion. Internet marketing online advertising PPC search engine advertising is about producing leads. Creating leads will help potential buyers find the specific website that will provide them with the product or service they need.

However, Internet marketing online advertising PPC search engine advertising does not end there. It is important to understand that although Internet marketing online advertising PPC search engine advertising generates leads, it is also important for users to find high relevant information at the website they are directed to. Information is a valuable asset in Internet marketing online advertising PPC search engine advertising that is often left unchecked by many websites. Keep in mind that users are more likely to purchase products or services from a company that provided them with the necessary information they needed in the first place.

Also, my experiences show that normal users are looking for the information on the internet rather than buying any products or services. Don’t get me wrong! I am trying to say that you have to provide high quality & relevant information wrapping around the quality products and services. Once people find the information they are looking for, they might make a purchase on your website.

You’ll discover why you have to use the internet marketing online advertising PPC search engine strategy to boost your sales & earn big money on the internet at home below.

One of the MAJOR benefits of Internet marketing online advertising PPC search engine advertising is that it drives qualified & laser-targeted traffic to a specific website. Users that click on a PPC ad are those in search of a particular product or service. This helps eliminate unnecessary clicks from non-prospective buyers that only produce expenditures not profits. Internet marketing online advertising PPC search engine advertising is also the fastest way to get a reasonable return on investment and it is one of the most effective reputable ways to make money online.

A bidding process is used to establish the price of a specific keyword. Typically, the budget for Internet marketing online advertising PPC search engine advertising may be a $100 to $100,000 depending on the number of keywords used. These prices can skyrocket in just minutes as more and more sites bid for the same keyword thus causing the prices to jack up.

PPC ads are placed alongside search engine results to which they are relevant. The highest bids for a specific keyword or phrase gets top billing on the search engine results page. Getting top placement provides greater odds for a PPC ad to get clicked by a qualified searcher.

Personally, the effective keyword research is one of the major key successes in the internet marketing online advertising PPC search engine. You have to learn how to do your own keyword research effective and find more niche keywords. I highly recommend you to start learning and discovering your own keyword research tool at http://www.zKeywordTool.com

There are the significant elements of internet marketing online advertising PPC search engine advertising you MUST know. You’ll find the elements of how to use effectively the online advertising PPC here.

Internet marketing online advertising PPC search engine advertising involves three basic elements; constant monitoring, response analysis and refinement as the essential factors involved in the internet marketing online advertising PPC search engine advertising. Proper management of Internet marketing online advertising PPC search engine advertising can result in big profits for a website.

Internet marketing online advertising PPC search engine advertising makes it possible for websites to monitor the productivity of each PPC ad they place. This gives a website the make money home based opportunity to turn off any PPC ad that is not performing at its best. Internet marketing online advertising PPC search engine advertising provides the most economical way for a site to advertise on the World Wide Web.

The cost entailed in Internet marketing online advertising PPC search engine advertising is dictated by the clicks made on a particular PPC ad. The number of clicks made on a PPC ad is subtracted from the initial amount paid by the business to a search engine company. To minimize cost and maximize return on investment, a business will have to regularly monitor its internet marketing online advertising PPC search engine advertising campaign.

You’ll discover how to use effectively internet marketing online advertising PPC search engine advertising below.

Many home based online businesses are unable to get the most out of their internet marketing online advertising PPC search engine advertising campaign. The internet marketing online advertising PPC search engine advertising involves a lot more than just bidding on the highest keywords. Information is a main concern of many online users.

Providing online users, with hard-to-find, high relevant & quality information they need, will help bring about a more long-term relationship with an online user that will more likely result in a sale.

Information provided to online users may be in the form of a newsletter or e-zine that online users would likely sign up for. Sign-ups may be enough to cover the expenses of an internet marketing online advertising PPC search engine advertising campaign.

Sign-ups also help generate leads for websites as they build opt in list from qualified online searchers who clicked their PPC ad. Getting personal information from qualified online searchers can be done in a variety of ways such as offering freebies for surveys or signing up for newsletters.

The internet marketing online advertising PPC search engine advertising is a continuous process that requires hands on supervision and a thorough understanding of Internet marketing online advertising PPC search engines. Businesses may opt to hire the services of a professional or do Internet marketing online advertising PPC search engine advertising with in-house experts. Whatever course of action is selected, a business is sure to get a huge return on investment with Internet marketing online advertising PPC search engine advertising.

Finally, I am sure that the internet marketing online advertising PPC search engine is one of the most effective and reputable ways to make money online. You’ll earn big money on the internet at home if you know appropriately how to build highly PPC campaigns for your long-term home based online business. The online advertising PPC is a real home based business opportunity and required strategy for people who are looking for earning big money on the internet at home.

Learn more about the internet marketing online advertising PPC search engine and start earning big money on the internet at home now. You’ll discover great articles, news, tips, techniques and secrets of how to build highly profitable ppc campaigns.

More often than not, advertising generally involves an element of cost, although it is possible to do it for free if you know how to go about it. Free advertising is easier to get with an online business than a traditional offsite concern. Generally, however, advertisers will pay publishers or media and broadcasting companies to provide the advertising platform of a newspaper, radio or television.

What is Advertising

1. Advertising consists of written and oral messages that are directed to a target audience.

2. Advertising persuades the public to purchase a certain product or service.

3. Each advertisement is related to a certain advertiser who is selling the product or service involved.

4. Advertising requires the advertiser to pay the publisher in return for the advertisement.

In summary, advertising is any paid form or message that presents goods or services of a certain advertiser or sponsor, and should present the product in such a way as to persuade the reader or listener to purchase the product.

Objectives of Advertising

Its objective is to stimulate sales, create customer retention and increase cash flow. However it also be intended to brand a product, since branding can do more for sales than simply advertising it. When one thinks of specific items, they often think of a brand name rather than the product itself.

Hence, vacuum cleaners became so connected to the brand name Hoover, that it became synonymous for a vacuum cleaner. It even entered the English vocabulary in the sense of ‘hoovering up’ being given the meaning of clearing something away.

The functions of Advertising for a company can be classified into two groups. These are known as the primary and the secondary functions.

Primary Objectives

1. Advertising helps increase sales of the service or product because it helps promote it to a bigger market. People who don’t previously know about that product or service become aware of it because of the advertisement about it.

2. Sales persuasion is frequently used to help buyers decide on their next purchase.

3. Advertising also helps dealers or franchisees to sell the product or service being featured.

4. Advertisement makes it easy for a company to adjust to a new product or service. People are most likely to welcome a new item or service if they have already seen it in an advertisement. Many companies commence the branding of a product before it has hit the shelves.

5. Buyers tend have a better view of a well advertised product or service as compared to those that don’t have any advertisements or are poorly advertised. People tend to purchase products they are familiar with, and a well thought out advertising campaign can achieve that.

6. Advertising leads to branding and promotes brand loyalty as well. Once a user has become satisfied with a specific brand, they tend to stay with it.

7. Products and services that are advertised are deemed as better and higher quality products or services by the public. Many take the erroneous view that if it is well advertised then it must be good.

Secondary Functions

1. To encourage salesmen and provide that feeling of support especially when they are dealing with hard to get customers. Sales staff find their job easier with a good advertising campaign behind them.

2. When a company makes use of advertising, it helps employees feel more secure in their jobs. If a company can pay a substantial amount just for advertising purposes, then the workers will feel that it’s a good company to work for and remain loyal with.

3. Advertising helps the company to attract better or more qualified employees.

So, advertising has many facets and objectives, and its functions are more than just letting the world know of the existence of a specific product.

Traditional television audiences are eroding.  In October, the four biggest broadcast networks reported declines in audiences between the ages of 18 and 49.   Many analysts believe that those eyeballs are moving from television to online.  Advertising Age, in a study on social networking and its impact on television, found that 25% of users of social networking sites like Facebook indicated they were spending less time watching TV because of the time they were spending online.  And more than a third of all 12 – 64 year olds online indicated they used social networking sites regularly.   With audiences being siphoned away from television, and using time-shifting digital video recorder (DVR) technology like TiVo to skip ads while they are watching TV, advertising dollars to be had in the broadcast medium are on the decline.

So media companies should simply follow their audiences online, right?  The picture is not that clear.  The current economic climate is eroding ad spending across the board.  TechCrunch indicates that in the third quarter, Google, Yahoo, Microsoft and AOL collectively eked out only a 0.6% increase in online advertising revenue quarter over quarter.  MediaPost.com reports that, while online ad revenue is up 11% year-to-date, compared to last year’s growth of 26%, growth has all but stalled in 2008.   They predict that 2009 will be the first flat year for online ad spending since 2003.  Others offer an even gloomier outlook.  In a survey of attendees at AdTech New York, private equity firm Halyard Capital found most predicted digital-marketing budgets would be down 10-20% in 2009.

And even worse news for media companies: rates that advertisers are paying for digital ad space, as traditionally measured by cost-per-thousand impressions (CPM), are trending downward.  According to research by Morgan Stanley, the average CPM for a banner ad has dropped from  $3 to $1 over the past decade.  Consensus seems to be this is because of the proliferation of available inventory (places on the internet to display these ads).  In China, advertisers are paying as little as $.05 CPM because of the rapid explosion of inventory.  And MediaPost predicts that this decline in the rates advertisers are paying will extend to online video advertising in 2009, which is an area that has been enjoying a two year spike in CPMs.

But what about those social networks to which television viewers are being drawn?  Do they offer hope?  Halyard Capital found that 68% of those surveyed believed social networks are in the “strongest position to expand” among the alternative marketing channels over the next two years.   Advertisers see vast potential in social networking as a channel in which to better target advertising to consumers because of all of the personal information being shared.  And content providers see opportunities to tie together traditional media and social networking.  Broadcasters are starting to incorporate community features into their online video players.  Companies like Joost are tapping into social networks like Facebook for social video sharing.

At first glance, then, social networks seem to offer promise as an advertising haven in an economic downturn.   Sites like Facebook, MySpace and YouTube boast a tremendous number of pageviews, a higher than average number of pageviews per user, and a longer average time-on-site.  In a CPM-driven world, this massive pool of pageviews represents a virtual treasure trove of “inventory,” because of the sheer number of eyeballs.  The problem, however, is that the data shows that the actual performance of ads on these social networks is absolutely dismal. Click-through rates on these sites are 10 to 100 times lower than the average for banner ads, which were already in the 0.1 percent to 1 percent range.

According to Dr. Augustine Fou, Senior VP of Digital Strategy at MRM Worldwide, a digital marketing agency, the very nature of social networking sites make them unsuitable for traditional advertising:

“While the largest Web 1.0 sites (Yahoo, CNET, New York Times, etc.) were content sites that aggregated massive audiences and supported large numbers of pageviews, the largest Web 2.0 sites are social networking sites. The nature of these two types of sites is very different. Users go to Web 1.0 sites and portals to read content or do e-mail by themselves. Users go to Web 2.0 social networks to interact with others and are usually so immersed in socializing they are even less likely to see, let alone act upon, ads, despite the large number of pageviews generated per session. This may partially explain the dramatically lower click rates for ads on social networking sites. “

Ted McConnell, general manager-interactive marketing and innovation at Procter & Gamble Co., postulates that social networks are not only ineffective channels for advertising, they are wholly inappropriate places to market in which attempts to do so alienate consumers.   McConnell poses the question to advertisers: “What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?”   He makes the point that “social media” is not really “media” at all.  Media is a one-way communication that contains blank spaces that constitute inventory for advertising.  Social networking is a dialog between consumers, in which advertising becomes disruptive.  Consumers were not intending to create media, they were intending to talk to someone.

If television ad revenue is on the decline, digital ad spending on the whole is trending downward, and social networks are failing to deliver on their promise to reach consumers, what can advertisers and media companies do to weather the storm?  Advertisers must ensure that they are getting the best return on investment they can on their remaining ad spending dollars.  Instead of paying for the biggest number of eyeballs they can, they should focus on advertising best positioned to make a conversion.  Online, this likely signals a needed shift from a CPM model, where advertisers pay for the number of folks who will see an ad, to performance-based measurements.  An ad model based on performance would have advertisers paying only for clicks or other targeted consumer actions.

McConnell predicts that as the economy worsens, the fortune of performance-based advertising will rise as impression-based models falter. “‘Spray and pray’ is a little harder to do when you’re under economic pressure,” he said. “So performance-based advertising will gain share over CPM.”

And according to Dr. Fou, “in the Web 2.0 advertising landscape, many advertisers have already moved beyond the cost-per-impression (CPM) model to a more measurable and accountable cost-per-click (CPC) model (e.g., Google Adwords) in which they only pay when users click through, no matter how many times the ad is displayed. Some have even moved to the next step of cost-per-action (CPA), where the advertiser does not pay until the user does the desired action-e.g., make a purchase. “

How can media companies respond to the demand for performance-based advertising?  It is no longer enough to simply make inventory available, now these companies must ensure that the advertisements will be effective.  This means that it will be more important than ever to target the right advertising to the right consumer at the right time.  And media companies will have to work directly with the advertisers to ensure that advertising is tightly integrated with the content in a way that provides the right context and timing for the message.

One channel that offers some interesting promise for targeting of content is mobile.  62% of AdTech’s attendees responding to the survey by Halyard cited mobile as the advertising platform that will grow the most in the next two years.   Mobile has the potential to target a consumer at exactly the right time and the right place.  Imagine walking into a drug store and receiving a coupon by text message on your mobile phone for an over-the-counter pain reliever.  That is the power of location-based advertising, made possible by the proliferation of global positioning system (GPS) technology on mobile phones, that allows providers to know exactly where you are.  This is not science fiction – companies like Loopt and NAVTEQ are already starting to serve up location-based ads on a handset near you.

And while social networks may not prove to be the holy grail in providing a channel for advertising, their vast potential for understanding and targeting consumers may still be the key to effective advertising in a performance-based world.  Dr. Fou explains that “By redefining social networks as ‘the collective conversations and actions of customers, evidenced online,’ marketers can instead use social networks as places to do research-e.g., test messages with real customers in a real environment, listen to how customers describe their products or services to peers, or get ideas for new products or how to improve current products. And finally, advertisers can identify influencers, mavens or ‘heavies’ on social networks (the ones who are most active in talking, posting or sharing) and let them beta-test and write about their product or service.”

Not only can social networks help advertisers better identify, understand and influence their targets, they have the potential to exponentially extend their reach.   According to Advertising Age, there is “emerging evidence that mapping the online relationships among consumers — creating so-called social graphs — can be just as valuable as traditional targeting and segmentation in predicting how people will respond to marketing messages.”  The idea is to not only market to your identified target consumer, but market to the other people in that consumer’s social network.  The theory is that advertisers should associate “consumers who are already connected and share values and beliefs, a concept called homophily.”  Yahoo and several small start-ups are starting to prove out this theory.

Finally, there may still be hope for television.  In early November, Dish Network struck a deal with advertising technology firm Invidi that involves the creation of “advanced receivers” capable of “targeted advertising delivery” and “dynamic commercial insertion.”  According to Advertising Age, what this means is “[r]ather than bombarding millions of TV viewers with the same ads for things many of them may not be looking to buy, marketers could in the next two to three years send different ads to different households — making certain, for example, that Procter & Gamble wouldn’t have to pay for Pampers ads watched by a couple with no wee tykes and General Motors wouldn’t have to show ads for its Hummer vehicles to a house full of Prius enthusiasts.”  Industry experts believe that if consumers are presented with highly relevant advertising, they are far less inclined to skip the ad on their DVR.

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