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The Online Advertisement Market - Research Paper Example

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Online Advertising Market Online Advertising market has grown around the two key modalities: search and display advertising. Online advertising first came into being in 1994when a web magazine called Hot Wire sold an ad banner to AOL which was displayed on its web page (Kaye & Medoff, 2001)…
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The Online Advertisement Market
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"The Online Advertisement Market"

Download file to see previous pages In 1996, Procter and Gamble executed a deal with Yahoo! in which the basis of revenue calculation was number of clicks on the advertisement instead of number of views which was the norm of the day (Google and Yahoo news, 1996). This basis of compensation was quickly picked up by the media contemporaries since it provided a more focussed approach similar to the ones employed for direct response of the prospect through mail and telephone solicitations. It came to be known as CPC or Cost per Click method of online advertisement compensation. Inspite of its rapid popularity, CPM still remains the basis of many advertisements placements, particularly in the display ads segment. Online advertising revenue has steadily increased its share in the advertising industry both in absolute and percentage terms. For example, in US alone, the online advertising industry has grown from 3.2% in 2000 to 8.8% of total advertising, and from 8.1 billion in 2000 to 21.7 billion in 2007 (data derived from Interactive Advertising Bureau Press Releases 2000-2007). From connecting computers in government offices, internet has come a long way since 1994 when it was opened for public for the first time. Internet users figure has jumped from 0.4 % of the world population in 1995 to 29.9% in 2010 (IWS, 2011). According to Coffman and Odlyzko, internet traffic almost doubled every four months in 1995- 96. The growth after that has been doubling on a yearly basis since then till 2001 (Coffman & M.Odlyzko, 2001). Main reasons for such drastic growth of internet are the ease of access and usability of internet, huge inventory of data and excellent connectivity instantly. Internet growth is a phenomenon which has not only changed the way individuals work but has also deeply impacted the culture and commerce of countries. The advent of social networking and entertainment in internet arena has further increased the scope of internet users. Before comparing print and online advertisement, it is imperative to focus on the relationship between content and advertisements published through the two mediums. In print media, the ad is essentially locked with the content i.e. the ad is visible only for that particular day’s content. However, in internet medium, even if the content changes, the ad would still be there. This means that the chances of showcasing an old ad in print media exist only in retrieval of archives. However, the ads in internet are always current, unless it’s the reproduction of archived prints. The relationship or the non-existence of relationship between content and ads has encouraged several journals to open their archives for free which results in increased traffic to the website, thereby increasing its ad revenues (Kohler, 2006). This has changed the way print media looks at ads on its digital editions. Major differences that exist between print media advertising and online advertising are in terms of geographic reach, demographic targeting and ongoing revenues. While the ads in print media have limited geographic reach, online advertising is virtually everywhere. Also, print media ads have limited capacity to customize themselves based on geographic targets than online media. For example, it is nearly impossible for a newspaper to serve a different edition for every city of the world while it is very much possible to serve online ads based on the user’s location. Also, online ads can be updated irrespective of the content, as they ...Download file to see next pagesRead More
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