Advertising on the Internet - Essay Example

The world of advertising was not always the cut-throat competitive field it is today. Ads in television and newspapers were the norm a decade ago, and internet was just one of the new things on the horizon. Internet advertising actually began in 1994 when HotWired contracted 14 advertisers for its entry in the online market. In the next two years, the internet gained in popularity as a possible advertising medium, and by 1997, websites were already being advertised in the traditional media. As Kaye puts it: "The growth of Internet advertising since its 1994 birth has been truly phenomenal. What started out with banners as bland and common as roadside billboards has exploded into a rich-media interactive environment that may soon rival the rabbit hole in Alice in Wonderland. (Kaye et al, 2001)." But the internet was not always popular as an advertising medium. At the end of the millennium, there was some serious soul-searching done by commercial enterprises on whether the internet really had the possibilities in advertising that had been earlier claimed. This was closely associated with the bursting of the dot.com bubble. As Schumann and Thorson point out in their book written in 1999: "Yet, many companies are growing disillusioned with the commercial possibilities of online advertising, and some have suggested that the Internet is better suited for interpersonal communication and personal sites rather than commercial sites.. Executives are questioning whether the potential of the Internet is real or just hype, and some companies are considering decreasing or removing their investment in online advertising".(Schumann et al, 1999) This changed down the years and the internet is now an established advertising medium due to a few specific reasons. The very first was the decreasing price of software and hardware. What used to be expensive software and hardware ten years ago has today become open source software and nearly free hardware. This has led to the increased possibility of setting up websites, and publishing content at low or negligible cost. This means more advertising space can be created at low cost. The second was wider accessibility and higher speed of the internet with the arrival of the broadband: bandwidth prices have gone down from $1000/mbps to less than $20/mbps. This has meant a larger audience, who are able to browse a large number of pages, and hence advertisements, in a short space of time. Moreover, the audience stays online longer because of the sheer speed and convenience of the medium. The internet has truly become a mass medium with two out of three people in the US surfing the internet, and a whole lot of the population, especially the youth, spending longer on the internet than on watching television. Thirdly, advertising strategies have matured in that the internet is no longer considered only a space which would provide for click-through purchases, but also opportunities for long-term brand-building. In the words of Greg Stuart, president of Interactive Advertising Bureau: "Internet advertising is without question taking share from the other media at this time and for good reason-marketers have figured out that online advertising is often the most cost-effective medium for influencing both branding and sales results." (Olsen, 2004) This brings us to our fourth reason for the establishment of the internet as an advertising medium: cost effectiveness. It is cheaper to place an ad on the internet than it is to run it in on the television or print media. One obvious example is the election campaigns run by the presidential candidates: while there are ads on TV and print, a whole host of candidates have chosen to go the internet advertising route, and possibly none has ignored the internet altogether. Right now, the internet as an advertising medium is competing with the traditional media not only because of its cost-effectiveness and an increased reach, but also because it has a potential that the television and print media do not. The single most important factor about internet advertising is that it can be targeted better to a specific consumer audience than is possible through the traditional media. "When a person explores a website, the website can record the Internet service provider, the type of computer and software used, the website linked from, the amount of time spent perusing each page, and exactly what parts of the website were explored and for how long. ..This is a unique vision, for while marketers can measure the size of audiences for other media such as television, radio, books, and magazines, they have little ability to measure attention span". (Solove, 2001) Moreover, a TV commercial is only available at certain intervals, and an ad in the print media can be repeated at the rate of maximum once a day, but an internet ad is constantly available, irrespective of time zones, and can stay up for as long as required: Internet advertising also gives advertisers the chance to accurately target an audience, enabling them to deliver ads that are customized to each user's particular interests and tastes. Internet advertising also allows advertisers to focus on users from specific companies, SIC codes, geographical regions and nations. In addition, marketers can track how users interact with their brands and learn what is of significance to their current customers and prospects. Most importantly, an Internet ad is delivered 24 hours a day, 7 days a week, 31 days a month.(Yang et al, 2004) The targeting is possible because the internet provides a way to find out exactly how a visitor reacts to a particular web page, the attention span, and the number of click-throughs an ad generates. This means that advertisers can be given the exact data as to how many sales were generated as the result of an advertisement. As a result of these factors, advertising has seen a rise in the field of internet. Instead of trying to compete with the internet as a medium, where the individual opinion is usually strong, advertising agencies have dived straight into the medium and used it to their own advantage. According to statistics in 2007, the growth in internet advertising has been phenomenal: "Overall, the online ad sector has grown wildly in the past 10 years, increasing from $907 million in 1997, when it accounted for less than 1 percent of all advertising. Now, interactive ads represent 5.9 percent of the $286 billion spent last year by advertisers".(Kim, 2007) Though internet advertising has come a long way, it still has a few challenges to overcome. The traditional banner ads can easily be scrolled out of the screen, and those in vertical bars also ignored. They are boring, and seem too much like ads in the print media. So, a large portion of internet advertising is now pop-up and floating, which come up when the viewer is trying to access a web page. This has become a source of irritation for surfers, who avoid websites with too many pop-up or floating ads. The challenge is to make these pop-ups entertaining and animated enough to hold attention. To attract viewers for ads, internet advertising has now introduced video ads which are typically 10-30 second slots before the commencement of online videos. Since viewers tend to avoid videos with commercials, advertising agencies have come up with the concept of overlay, where an ad plays on top of the video and is therefore unavoidable. These are symptoms of the biggest challenge faced by internet advertising now and in the coming years: that of adapting to the medium. To be genuinely successful at internet advertising and bring it on par with television commercials, one must realize, as a few companies like Google have done, that when on the internet, the audience is purposeful, independent-minded and interactive. So flashing banners and pop-ups, which are a translation of the print media, or streaming videos, which borrow from tele-commercials, just won't work. Internet advertising needs to provide relevant content, it needs to be less intrusive, and respect the audience's choice on clicking a particular ad because of its relevance to their particular needs. Such advertising needs to exploit the interactivity the medium provides in creative ways in order to drive home a message about products and services. Just as radio jingles have eventually almost disappeared from TV ads, one hopes that banners, pop-ups and videos would one day be replaced with a way of advertisement totally adapted and unique to the internet. Works Cited: Kaye, Barbara K. and Norman J. Medoff. Just A Click Away: Advertising on the Internet. Boston, MA : Allyn and Bacon: 2001, p.32. Kim, Ryan, "Internet ads reach quarterly record , $4.9 billion revenue is 26 percent more than at start of 2006", San Francisco Chronicle, June7, 2007. Oct 18, 2007< http://www.sfgate.com/cgi-bin/article.cgif=/c/a/2007/06/07/BUG52QAAIR1.DTL> Olsen, Stefanie, "Net ads ring up rising sales", CNETnews.com, September 20,2004. Oct 18, 2007 Schumann , David. W and Esther Thorson, E(eds.) Advertising and the World Wide Web. Mahwah, NJ: Lawrence Erlbaum Associates, 1999, p.41. Solove, Daniel J., Privacy and Power: Computer Databases and Metaphors for Information Privacy. Stanford Law Review. Vol: 53.Iss: 6, 2001, p.1393 Yang, Catherine, and Jay Greene. You've Got Mail - But Not Enough Ads. [Electronic version] Business Week, (3905), 2004). p.48. Read More