Online Advertising Book

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    Online advertising

    Online advertising, also called online marketing or In-

    ternet advertising or web advertising, is a form of mar-

    keting and advertising which uses the Internet to deliver

    promotional   marketing messages to consumers. It in-

    cludes email marketing, search engine marketing (SEM),

    social media marketing, many types of display advertis-

    ing  (including web banner advertising), and mobile ad-

    vertising. Like other advertising media, online advertis-

    ing frequently involves both a publisher, who integrates

    advertisements into its online content, and an advertiser,

    who provides the advertisements to be displayed on thepublisher’s content. Other potential participants include

    advertising agencies who help generate and place the ad

    copy, an ad server which technologically delivers the ad

    and tracks statistics, and advertising affiliates who do in-

    dependent promotional work for the advertiser.

    In 2011, Internet advertising revenues in the United States

    surpassed those of cable television and nearly exceeded

    those of  broadcast television.[1]:19 In 2013, Internet ad-

    vertising revenues in the United States totaled $42.8 bil-

    lion, a 17% increase over the $36.57 billion in revenues

    in 2012.[2]:4–5 U.S. internet ad revenue hit a historic high

    of $20.1 billion for the first half of 2013, up 18% overthe same period in 2012.[3] Online advertising is widely

    used across virtually all industry sectors.[1]:16

    Many common online advertising practices are contro-

    versial and increasingly subject to regulation. Online ad

    revenues may not adequately replace other publishers’

    revenue streams. Declining ad revenue has led some pub-

    lishers to hide their content behind paywalls.[4]

    1 History

    In early days of the Internet, online advertising was

    mostly prohibited. For example, two of the predeces-

    sor networks to the Internet,  ARPANET and NSFNet,

    had “acceptable use policies” that banned network “use

    for commercial activities by for-profit institutions”.[5][6]

    The NSFNet began phasing out its commercial use ban

    in 1991.[7][8][9][10]

    1.1 Email

    The first widely publicized example of online advertis-

    ing was conducted via electronic mail. On 3 May 1978,a marketer from DEC (Digital Equipment Corporation),

    Gary Thuerk, sent an email to most of the ARPANET’s

    American west coast users, advertising an open house for

    a new model of a DEC computer.[6][11] Despite the pre-

    vailing acceptable use policies, electronic mail market-

    ing rapidly expanded[12] and eventually became known

    as "spam.”

    The first known large-scale non-commercial spam mes-

    sage was sent on 18 January 1994 by an Andrews Uni-

    versity system administrator, by cross-posting a religious

    message to all   USENET   newsgroups.[13] Four months

    later,  Laurence Canter and Martha Siegel, partners in

    a law firm, broadly promoted their legal services ina USENET posting titled “Green Card Lottery – Fi-

    nal One?"[14] Canter and Siegel’s Green Card USENET

    spam raised the profile of online advertising, stimulat-

    ing widespread interest in advertising via both Usenet

    and traditional email.[13] More recently, spam has evolved

    into a more industrial operation, where  spammers   use

    armies of virus-infected computers (botnets) to send

    spam remotely.[11]

    1.2 Display ads

    Online banner advertising began in the early 1990s as

    page owners sought additional revenue streams to sup-

    port their content. Commercial online service  Prodigy

    displayed banners at the bottom of the screen to promote

    Sears products.[15] The first clickable web ad was sold by

    Global Network Navigator in 1993 to a Silicon Valley law

    firm.[16] In 1994, web banner advertising became main-

    stream when HotWired, the online component of Wired

    Magazine, sold banner ads to  AT&T and other compa-

    nies. The first AT&T ad on HotWired had a 44% click-

    through rate, and instead of directing clickers to AT&T’swebsite, the ad linked to an online tour of seven of the

    world’s most acclaimed art museums.[17][18]

    1.3 Search ads

    GoTo.com (renamed Overture in 2001, and acquired by

    Yahoo! in 2003) created the first search advertising key-

    word auction in 1998.[19]:119 Google   launched its “Ad-

    Words” search advertising program in 2000[20] and intro-

    duced quality-based ranking allocation in 2002,[21] whichsorts search advertisements by a combination of bid price

    and searchers’ likeliness to click on the ads.[19]:123

    1

    https://en.wikipedia.org/wiki/Googlehttps://en.wikipedia.org/wiki/Yahoo!https://en.wikipedia.org/wiki/Overture_Serviceshttps://en.wikipedia.org/wiki/AT&Thttps://en.wikipedia.org/wiki/Wired_(magazine)https://en.wikipedia.org/wiki/Wired_(magazine)https://en.wikipedia.org/wiki/HotWiredhttps://en.wikipedia.org/wiki/Global_Network_Navigatorhttps://en.wikipedia.org/wiki/Searshttps://en.wikipedia.org/wiki/Prodigy_(online_service)https://en.wikipedia.org/wiki/Botnethttps://en.wikipedia.org/wiki/List_of_spammershttps://en.wikipedia.org/wiki/Laurence_Canter_and_Martha_Siegelhttps://en.wikipedia.org/wiki/USENEThttps://en.wikipedia.org/wiki/Cross-posthttps://en.wikipedia.org/wiki/Andrews_Universityhttps://en.wikipedia.org/wiki/Andrews_Universityhttps://en.wikipedia.org/wiki/Spam_(electronic)https://en.wikipedia.org/wiki/Gary_Thuerk#History_of_Internet_spamhttps://en.wikipedia.org/wiki/Digital_Equipment_Corporationhttps://en.wikipedia.org/wiki/NSFNethttps://en.wikipedia.org/wiki/ARPANEThttps://en.wikipedia.org/wiki/Paywallhttps://en.wikipedia.org/wiki/Broadcast_televisionhttps://en.wikipedia.org/wiki/Cable_televisionhttps://en.wikipedia.org/wiki/Advertising_affiliatehttps://en.wikipedia.org/wiki/Ad_serverhttps://en.wikipedia.org/wiki/Advertising_agencieshttps://en.wikipedia.org/wiki/Mobile_advertisinghttps://en.wikipedia.org/wiki/Mobile_advertisinghttps://en.wikipedia.org/wiki/Web_bannerhttps://en.wikipedia.org/wiki/Display_advertisinghttps://en.wikipedia.org/wiki/Display_advertisinghttps://en.wikipedia.org/wiki/Search_engine_marketinghttps://en.wikipedia.org/wiki/Promotion_(marketing)

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    2   2 DELIVERY METHODS 

    1.4 Recent trends

    More recently, companies have sought to merge their

    advertising messages into editorial content or valuable

    services. Examples include Red Bull's Red Bull Media

    House streaming Felix Baumgartner's jump from space

    online, Coca-Cola's online magazines, and Nike's free ap-plications for performance tracking.[18] Advertisers are

    also embracing social media[22][23] and mobile advertis-

    ing; mobile ad spending has grown 90% each year from

    2010 to 2013.[1]:13

    2 Delivery methods

    2.1 Display advertising

    Display advertising conveys its advertising message visu-

    ally using text, logos, animations, videos, photographs, or

    other graphics. Display advertisers frequently target users

    with particular traits to increase the ads’ effect. Online

    advertisers (typically through their ad servers) often use

    cookies, which are unique identifiers of specific comput-

    ers, to decide which ads to serve to a particular consumer.

    Cookies can track whether a user left a page without buy-

    ing anything, so the advertiser can later  retarget the user

    with ads from the site the user visited.[24]

    As advertisers collect data across multiple external web-

    sites about a user’s online activity, they can create a de-

    tailed picture of the user’s interests to deliver even more

    targeted advertising. This aggregation of data is called

    behavioral targeting.[25] Advertisers can also target their

    audience by using contextual and semantic advertising to

    deliver display ads related to the content of the web page

    where the ads appear.[19]:118 Retargeting, behavioral tar-

    geting, and contextual advertising all are designed to in-

    crease an advertiser’s return on investment, or ROI, over

    untargeted ads.[26]

    Advertisers may also deliver ads based on a user’s sus-

    pected geography through geotargeting. A user’s IP ad-

    dress   communicates some geographic information (at

    minimum, the user’s country or general region). The geo-

    graphic information from an IP can be supplemented and

    refined with other proxies or information to narrow the

    range of possible locations.[27] For example, with mobile

    devices, advertisers can sometimes use a phone’s GPS re-

    ceiver or the location of nearby mobile towers.[28] Cook-

    ies and other persistent data on a user’s machine may pro-

    vide help narrowing a user’s location further.[27]

    2.1.1 Web banner advertising

    Web banners or banner ads typically are graphical ads dis-

    played within a web page. Many banner ads are deliveredby a central ad server.

    Banner ads can use rich media to incorporate video, au-

    dio, animations, buttons, forms, or other interactive el-

    ements using  Java applets,  HTML5,  Adobe Flash, and

    other programs.

    Frame ad (traditional banner)   Frame ads were the

    first form of web banners.[17] The colloquial usage of“banner ads” often refers to traditional frame ads. Web-

    site publishers incorporate frame ads by setting aside a

    particular space on the web page. The Interactive Adver-

    tising Bureau's Ad Unit Guidelines proposes standardized

    pixel dimensions for ad units.

    Pop-ups/pop-unders   A   pop-up ad   is displayed in a

    new web browser window that opens above a website vis-

    itor’s initial browser window.[29] A pop-under ad opens

    a new browser window under a website visitor’s initial

    browser window.[1]:22 Pop-under ads and similar tech-

    nologies are now advised against by online authorities

    such as Google, who state that they “do not condone this

    practice”.[30]

    Floating ad   A floating ad, or overlay ad, is a type of

    rich media advertisement that appears superimposed over

    the requested website’s content. Floating ads may disap-

    pear or become less obtrusive after a preset time period.

    Expanding ad   An expanding ad is a rich media frame

    ad that changes dimensions upon a predefined condition,such as a preset amount of time a visitor spends on a web-

    page, the user’s click on the ad, or the user’s mouse move-

    ment over the ad.[31] Expanding ads allow advertisers to

    fit more information into a restricted ad space.

    Trick banners   A trick banner is a banner ad where the

    ad copy imitates some screen element users commonly

    encounter, such as an operating system message or pop-

    ular application message, to induce ad clicks.[32] Trick

    banners typically do not mention the advertiser in the ini-

    tial ad, and thus they are a form of bait-and-switch.[33][34]

    Trick banners commonly attract a higher-than-averageclick-through rate, but tricked users may resent the ad-

    vertiser for deceiving them.[35]

    News Feed Ads   “News Feed Ads”, also called “Spon-

    sored Stories”, “Boosted Posts”, typically exist on Social

    Media Platforms that offer a steady stream of informa-

    tion updates (“news feed”[36]) in regulated formats (i.e.

    in similar sized small boxes with a uniform style). Those

    advertisements are intertwined with non-promoted news

    that the users are reading through. Those advertisements

    can be of any content, such as promoting a website, a fanpage, an app, or a product.

    Some examples are: Facebook’s “Sponsored Stories”,[37]

    https://en.wikipedia.org/wiki/Click-through_ratehttps://en.wikipedia.org/wiki/Bait-and-switchhttps://en.wikipedia.org/wiki/Rich_mediahttps://en.wikipedia.org/wiki/Pop-under_adhttps://en.wikipedia.org/wiki/Pop-up_adhttps://en.wikipedia.org/wiki/Interactive_Advertising_Bureauhttps://en.wikipedia.org/wiki/Interactive_Advertising_Bureauhttps://en.wikipedia.org/wiki/Adobe_Flashhttps://en.wikipedia.org/wiki/HTML5https://en.wikipedia.org/wiki/Java_applethttps://en.wikipedia.org/wiki/Rich_mediahttps://en.wikipedia.org/wiki/Central_ad_serverhttps://en.wikipedia.org/wiki/Banner_adhttps://en.wikipedia.org/wiki/Web_bannerhttps://en.wikipedia.org/wiki/GPShttps://en.wikipedia.org/wiki/IP_addresshttps://en.wikipedia.org/wiki/IP_addresshttps://en.wikipedia.org/wiki/Geotargetinghttps://en.wikipedia.org/wiki/Return_on_investmenthttps://en.wikipedia.org/wiki/Semantic_technologyhttps://en.wikipedia.org/wiki/Contextual_advertisinghttps://en.wikipedia.org/wiki/Behavioral_targetinghttps://en.wikipedia.org/wiki/Personalized_retargetinghttps://en.wikipedia.org/wiki/HTTP_cookiehttps://en.wikipedia.org/wiki/Targeted_advertisinghttps://en.wikipedia.org/wiki/Display_advertisinghttps://en.wikipedia.org/wiki/Nike,_Inc.https://en.wikipedia.org/wiki/Coca-Colahttps://en.wikipedia.org/wiki/Felix_Baumgartnerhttps://en.wikipedia.org/wiki/Red_Bull

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    2.1 Display advertising   3

    LinkedIn’s “Sponsored Updates”,[38] and Twitter’s “Pro-

    moted Tweets”.[39]

    This display ads format falls into its own category because

    unlike banner ads which are quite distinguishable, News

    Feed Ads’ format blends well into non-paid news updates.

    This format of online advertisement yields much higherclick-through rates than traditional display ads[40][41]

    2.1.2 Display advertising process overview

    The process by which online advertising is displayed can

    involve many parties. In the simplest case, the web site

    publisher selects and serves the ads. Publishers which

    operate their own advertising departments may use this

    method.

    Publisher

    Ad Server

    Publisher

    Content

    Server

    Online advertising serving process - simple publisher case

    Theads may be outsourced to an advertising agency under

    contract with the publisher, and served from the advertis-

    ing agency’s servers.

    Publisher

    Ad Server

    Agency

    Ad Server

    Publisher

    Content

    Server

    Online advertising serving process using an ad agency

    PublisherAd Server

    Agency

    Ad Server

    PublisherContent

    Server

    Supplysideplatform

    Brand

    Agency

    AdExchange

    DemandSidePlatform

    DSP

    DSP

    DSP

    DSP

    DataManagement

    Platform

    AdExchange

    Online advertising serving process using online bidding

    Alternatively, ad space may be offered for sale in a bid-

    ding market using an   ad exchange  and real-time bid-

    ding. This involves many parties interacting automati-

    cally in real time. In response to a request from the user’s

    browser, the publisher content server sends the web page

    content to the user’s browser over the Internet. The page

    does not yet contain ads, but contains links which cause

    the user’s browser to connect to the publisher ad server

    to request that the spaces left for ads be filled in withads. Information identifying the user, such as cookies and

    the page being viewed, is transmitted to the publisher ad

    server.

    Thepublisher ad server then communicates with a supply-

    side platform server. The publisher is offering ad space

    for sale, so they are considered the supplier. The supply

    side platform also receives the user’s identifying informa-

    tion, which it sends to a data management platform. At

    the data management platform, the user’s identifying in-

    formation is used to look up demographic information,

    previous purchases, and other information of interest to

    advertisers.

    Broadly speaking, there are three types of data obtained

    through such a data management platform:

    First party data refers to the data retrieved from

    customer relationship management   (CRM)

    platforms, in addition to website and paid me-

    dia content or cross-platform data. This can

    include data from customer behaviors, actions

    or interests.[42]

    Second party data   refers to an amalgamationof statistics related to cookie pools on exter-

    nal publications and platforms. The data is

    provided directly from the source (adservers,

    hosted solutions for social or an analytics plat-

    form). It is also possible to negotiate a deal

    with a particular publisher to secure specific

    data points or audiences.[43]

    Third party data   is sourced from external

    providers and often aggregated from numerous

    websites. Businesses sell third-party data and

    are able to share this via an array of distribu-tion avenues.[44]

    This customer information is combined and returned to

    the supply side platform, which can now package up the

    offer of ad space along with information about the user

    who will view it. The supply side platform sends that offer

    to an ad exchange.

    The ad exchange puts the offer out for bid to  demand-

    side platforms. Demand side platforms act on behalf of

    ad agencies, who sell ads which advertise brands. De-

    mand side platforms thus have ads ready to display, and

    are searching for users to view them. Bidders get the in-formation about the user ready to view the ad, and decide,

    based on that information, how much to offer to buy the

    https://en.wikipedia.org/wiki/Demand-side_platformhttps://en.wikipedia.org/wiki/Demand-side_platformhttps://en.wikipedia.org/wiki/Ad_exchangehttps://en.wikipedia.org/wiki/Customer_relationship_managementhttps://en.wikipedia.org/wiki/Supply-side_platformhttps://en.wikipedia.org/wiki/Supply-side_platformhttps://en.wikipedia.org/wiki/Cookieshttps://en.wikipedia.org/wiki/Ad_exchange

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    4   2 DELIVERY METHODS 

    ad space. According to the Internet Advertising Bureau,

    a demand side platform has 10  milliseconds to respond

    to an offer. The ad exchange picks the winning bid and

    informs both parties.

    The ad exchange then passes the link to the ad back

    through the supply side platform and the publisher’s adserver to the user’s browser, which then requests the ad

    content from the agency’s ad server. The ad agency can

    thus confirm that the ad was delivered to the browser.[45]

    This is simplified, according to the IAB. Exchanges may

    try to unload unsold (“remnant”) space at low prices

    through other exchanges. Some agencies maintain semi-

    permanent pre-cached bids with ad exchanges, and those

    may be examined before going out to additional demand

    side platforms for bids. The process for mobile adver-

    tising is different and may involve mobile carriers and

    handset software manufacturers.[45]

    2.2 Interstitial

    An interstitial ad displays before a user can access re-

    quested content, sometimes while the user is waiting

    for the content to load.[46] Interstitial ads are a form of

    interruption marketing.[47][48]

    2.2.1 Text ads

    A text ad displays text-based hyperlinks. Text-based ads

    may display separately from a web page’s primary con-

    tent, or they can be embedded by hyperlinking individual

    words or phrases to advertiser’s websites. Text ads may

    also be delivered through email marketing  or text mes-

    sage marketing. Text-based ads often render faster than

    graphical ads and can be harder for ad-blocking software

    to block.[49]

    2.3 Search engine marketing (SEM)

    Search engine marketing, or SEM, is designed to in-

    crease a website’s visibility in search engine results pages

    (SERPs). Search engines provide sponsored results andorganic (non-sponsored) results based on a web searcher’s

    query.[19]:117 Search engines often employ visual cues

    to differentiate sponsored results from organic results.

    Search engine marketing includes all of an advertiser’s

    actions to make a website’s listing more prominent for

    topical keywords.

    2.3.1 Search engine optimization (SEO)

    Search engine optimization, or SEO, attempts to im-

    prove a website’s organic search rankings in SERPs by in-

    creasing the website content’s relevance to search terms.Search engines regularly update their algorithms to penal-

    ize poor quality sites that try to game their rankings, mak-

    ing optimization a moving target for advertisers.[50][51][52]

    Many vendors offer SEO services.[1]:22

    2.3.2 Sponsored search

    Sponsored search   (also called sponsored links, searchads, or paid search) allows advertisers to be included

    in the sponsored results of a search for selected key-

    words. Search ads are often sold via real-time auc-

    tions, where advertisers bid on keywords.[19]:118[53] In

    addition to setting a maximum price per keyword, bids

    may include time, language, geographical, and other

    constraints.[19]:118 Search engines originally sold listings

    in order of highest bids.[19]:119 Modern search engines

    rank sponsored listings based on a combination of bid

    price, expected click-through rate, keyword relevancy

    and site quality.[21]

    2.4 Social media marketing

    Social media marketing   is commercial promotion con-

    ducted through   social media   websites. Many compa-

    nies promote their products by posting frequent updates

    and providing special offers through their social media

    profiles.[54]

    2.5 Mobile advertising

    Mobile advertising is ad copy delivered through wireless

    mobile devices such as  smartphones,  feature phones, or

    tablet computers. Mobile advertising may take the form

    of static or rich media display ads, SMS (Short Message

    Service) or MMS  (Multimedia Messaging Service) ads,

    mobile search ads, advertising within mobile websites, or

    ads within mobile applications or games (such as intersti-

    tial ads, "advergaming,” or application sponsorship).[1]:23

    Industry groups such as the Mobile Marketing Associa-

    tion have attempted to standardize mobile ad unit spec-

    ifications, similar to the IAB’s efforts for general online

    advertising.[48]

    Mobile advertising is growing rapidly for several reasons.

    There are more mobile devices in the field, connectiv-

    ity speeds have improved (which, among other things, al-

    lows for richer media ads to be served quickly), screen

    resolutions have advanced, mobile publishers are becom-

    ing more sophisticated about incorporating ads, and con-

    sumers are using mobile devices more extensively.[1]:14

    The Interactive Advertising Bureau predicts continued

    growth in mobile advertising with the adoption of

    location-based targeting and other technological features

    not available or relevant on personal computers.[1]:14 In

    July 2014 Facebook reported advertising revenue for the

    June 2014 quarter of $2.68 billion, an increase of 67 per-

    cent over the second quarter of 2013. Of that, mobileadvertising revenue accounted for around 62 percent, an

    increase of 41 percent on the previous year.

    https://en.wikipedia.org/wiki/Facebookhttps://en.wikipedia.org/wiki/Advergaminghttps://en.wikipedia.org/wiki/Multimedia_Messaging_Servicehttps://en.wikipedia.org/wiki/Feature_phonehttps://en.wikipedia.org/wiki/Smartphonehttps://en.wikipedia.org/wiki/Mobile_advertisinghttps://en.wikipedia.org/wiki/Social_mediahttps://en.wikipedia.org/wiki/Social_media_marketinghttps://en.wikipedia.org/wiki/Search_engine_marketing#Paid_inclusionhttps://en.wikipedia.org/wiki/Organic_searchhttps://en.wikipedia.org/wiki/Search_engine_optimizationhttps://en.wikipedia.org/wiki/Search_engine_results_pageshttps://en.wikipedia.org/wiki/Search_engine_marketinghttps://en.wikipedia.org/wiki/Mobile_advertisinghttps://en.wikipedia.org/wiki/Mobile_advertisinghttps://en.wikipedia.org/wiki/Online_advertising#Email_advertisinghttps://en.wikipedia.org/wiki/Hyperlinkhttps://en.wikipedia.org/wiki/Interruption_marketinghttps://en.wikipedia.org/wiki/Millisecondshttps://en.wikipedia.org/wiki/Internet_Advertising_Bureau

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    2.11 Online marketing platform   5

    2.6 Email advertising

    Email advertising is ad copy comprising an entire email

    or a portion of an email message.[1]:22 Email marketing

    may be unsolicited, in which case the sender may give the

    recipient an option to opt out of future emails, or it may

    be sent with the recipient’s prior consent (opt-in).

    2.6.1 Chat advertising

    As opposed to static messaging, chat advertising refers to

    real time messages dropped to users on certain sites. This

    is done by the usage of live chat software or tracking ap-

    plications installed within certain websites with the op-

    erating personnel behind the site often dropping adverts

    on the traffic surfing around the sites. In reality this is a

    subset of the email advertising but different because of

    its time window.

    2.7 Online classified advertising

    Online classified advertising is advertising posted online

    in a categorical listing of specific products or services.

    Examples include online job boards, online real estate

    listings, automotive listings, online yellow pages, and on-

    line auction-based listings.[1]:22 Craigslist  and eBay are

    two prominent providers of online classified listings.

    2.8 Adware

    Adware is software that, once installed, automatically dis-

    plays advertisements on a user’s computer. The ads may

    appear in the software itself, integrated into web pages

    visited by the user, or in pop-ups/pop-unders.[55] Ad-

    ware installed without the user’s permission is a type of

    malware.[56]

    2.9 Affiliate marketing

    Affiliate marketing (sometimes called lead generation)

    occurs when advertisers organize third parties to gener-ate potential customers for them. Third-party affiliates

    receive payment based on sales generated through their

    promotion.[1]:22 Affiliate marketers generate traffic to of-

    fers from affiliate networks, and when the desired ac-

    tion is taken by the visitor, the affiliate earns a commis-

    sion. These desired actions can be an email submission,

    a phone call, filling out an online form, or an online order

    being completed.

    2.10 Content Marketing

    Content marketing is any marketing that involves the cre-ation and sharing of media and publishing content in or-

    der to acquire and retain customers. This information

    can be presented in a variety of formats, including blogs,

    news, video, white papers, e-books, infographics, case

    studies, how-to guides and more.

    Considering that most marketing involves some form of

    published media, it is almost (though not entirely) redun-

    dant to call 'content marketing' anything other than sim-ply 'marketing'. There are, of course, other forms of mar-

    keting (in-person marketing, telephone-based marketing,

    word of mouth marketing, etc.) where the label is more

    useful for identifying the type of marketing. However,

    even these are usually merely presenting content that they

    are marketing as information in a way that is different

    from traditional print, radio, TV, film, email, or web me-

    dia.

    2.11 Online marketing platform

    Online marketing platform (OMP) is an integrated  web-based platform that combines the benefits of a  business

    directory,   local search  engine,   search engine optimi-

    sation   (SEO) tool,   customer relationship management

    (CRM) package and content management system (CMS).

    Ebay   and   Amazon   are used as online marketing and

    logistics management platforms. On Facebook, Twitter,

    YouTube,  Pinterest,  LinkedIn, and other Social Media,

    retail online marketing is also used. Online business mar-

    keting platforms such as Marketo, Aprimo, MarketBright

    and Pardot have been bought by   major IT companies

    (Eloqua-Oracle, Neolane-Adobe and Unica-IBM).

    3 Compensation methods

    Advertisers and publishers use a wide range of payment

    calculation methods. In 2012, advertisers calculated

    32% of online advertising transactions on a cost-per-

    impression basis, 66% on customer performance (e.g.

    cost per click or cost per acquisition), and 2% on hybrids

    of impression and performance methods.[1]:17

    3.1 CPM (cost per mille)

    Cost per mille, often abbreviated to   CPM, means that

    advertisers pay for every thousand displays of their mes-

    sage to potential customers (mille is the Latin word for

    thousand). In the online context, ad displays are usually

    called “impressions.” Definitions of an “impression” vary

    among publishers,[57] and some impressions may not be

    charged because they don't represent a new exposure to

    an actual customer.[58] Advertisers can use technologies

    such as web bugs   to verify if an impression is actually

    delivered.[59][60]:59

    Publishers use a variety of techniques to increase pageviews, such as dividing content across multiple pages, re-

    purposing someone else’s content, using sensational titles,

    https://en.wikipedia.org/wiki/Web_bugshttps://en.wikipedia.org/wiki/Cost_per_millehttps://en.wikipedia.org/wiki/IBMhttps://en.wikipedia.org/wiki/Unica_Corporationhttps://en.wikipedia.org/wiki/Adobe_Systemshttps://en.wikipedia.org/wiki/Neolanehttps://en.wikipedia.org/wiki/Oracle_Corporationhttps://en.wikipedia.org/wiki/Eloquahttps://en.wikipedia.org/wiki/List_of_IT_consulting_firmshttps://en.wikipedia.org/wiki/Aprimohttps://en.wikipedia.org/wiki/Marketohttps://en.wikipedia.org/wiki/Business_marketinghttps://en.wikipedia.org/wiki/Business_marketinghttps://en.wikipedia.org/wiki/Retailhttps://en.wikipedia.org/wiki/Social_Mediahttps://en.wikipedia.org/wiki/LinkedInhttps://en.wikipedia.org/wiki/Pinteresthttps://en.wikipedia.org/wiki/YouTubehttps://en.wikipedia.org/wiki/Twitterhttps://en.wikipedia.org/wiki/Facebookhttps://en.wikipedia.org/wiki/Logistics_managementhttps://en.wikipedia.org/wiki/Amazon.comhttps://en.wikipedia.org/wiki/Ebayhttps://en.wikipedia.org/wiki/Content_management_systemhttps://en.wikipedia.org/wiki/Customer_relationship_managementhttps://en.wikipedia.org/wiki/Search_engine_optimizationhttps://en.wikipedia.org/wiki/Search_engine_optimizationhttps://en.wikipedia.org/wiki/Local_search_(Internet)https://en.wikipedia.org/wiki/Yellow_Pageshttps://en.wikipedia.org/wiki/Yellow_Pageshttps://en.wikipedia.org/wiki/World_Wide_Webhttps://en.wikipedia.org/wiki/World_Wide_Webhttps://en.wikipedia.org/wiki/Content_marketinghttps://en.wikipedia.org/wiki/Affiliate_networkhttps://en.wikipedia.org/wiki/Malwarehttps://en.wikipedia.org/wiki/Adwarehttps://en.wikipedia.org/wiki/EBayhttps://en.wikipedia.org/wiki/Craigslisthttps://en.wikipedia.org/wiki/Yellow_pages

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    6   4 BENEFITS OF ONLINE ADVERTISING 

    or publishing tabloid or sexual content.[61]

    CPM advertising is susceptible to “impression fraud,” and

    advertisers who want visitors to their sites may not find

    per-impression payments a good proxy for the results they

    desire.[62]:1–4

    3.2 CPC (cost per click)

    CPC (Cost Per Click) or PPC (Pay per click) means ad-

    vertisers pay each time a user clicks on the ad. CPC

    advertising works well when advertisers want visitors to

    their sites, but it’s a less accurate measurement for adver-

    tisers looking to build brand awareness.[63] CPC’s market

    share has grown each year since its introduction, eclips-

    ing CPM to dominate two-thirds of all online advertising

    compensation methods.[1]:18[62]:1

    Like impressions, not all recorded clicks are valuableto advertisers. GoldSpot Media reported that up to

    50% of clicks on static mobile banner ads are acciden-

    tal and resulted in redirected visitors leaving the new site

    immediately.[64]

    3.3 CPE (cost per engagement)

    Cost per engagement aims to track not just that an ad unit

    loaded on the page (i.e., an impression was served), but

    also that the viewer actually saw and/or interacted with

    the ad.[65][66]

    3.4 CPV (cost per view)

    Cost per view video advertising. Both Google and

    TubeMogul endorsed this standardized CPV metric to

    the IAB’s (Interactive Advertising Bureau) Digital Video

    Committee, and it’s garnering a notable amount of indus-

    try support.[67]

    3.5 Attribution of ad value

    Main article: Attribution (marketing)

    In marketing, “attribution” is the measurement of effec-

    tiveness of particular ads in a consumer’s ultimate deci-

    sion to purchase. Multiple ad impressions may lead to

    a consumer “click” or other action. A single action may

    lead to revenue being paid to multiple ad space sellers. [68]

    3.6 Other performance-based compensa-

    tion

    CPA (Cost Per Action or Cost Per Acquisition) or PPP

    (Pay Per Performance) advertising means the advertiser

    pays for the number of users who perform a desired ac-

    tivity, such as completing a purchase or filling out a regis-

    tration form. Performance-based compensation can also

    incorporate revenue sharing, where publishers earn a per-

    centage of the advertiser’s profits made as a result of the

    ad. Performance-based compensation shifts the risk of

    failed advertising onto publishers.[62]:4, 16

    3.7 Fixed cost

    Fixed cost compensation means advertisers pay a fixed

    cost for delivery of ads online, usually over a specified

    time period, irrespective of the ad’s visibility or users’ re-

    sponse to it. One examples is CPD (cost per day) where

    advertisers pay a fixed cost for publishing an ad for a day

    irrespective of impressions served or clicks.

    4 Benefits of online advertising

    4.1 Cost

    The low costs of electronic communication reduce the

    cost of displaying online advertisements compared to of-

    fline ads. Online advertising, and in particular social me-

    dia, provides a low-cost means for advertisers to engage

    with large established communities.[54] Advertising on-

    line offers better returns than in other media.[62]:1

    4.2 Measurability

    Online advertisers can collect data on their ads’ effec-

    tiveness, such as the size of the potential audience or ac-

    tual audience response,[19]:119 how a visitor reached their

    advertisement, whether the advertisement resulted in a

    sale, and whether an ad actually loaded within a visitor’s

    view.[59][60]:59 This helps online advertisers improve their

    ad campaigns over time.

    4.3 Formatting

    Advertisers have a wide variety of ways of presenting

    their promotional messages, including the ability to con-

    vey images, video, audio, and links. Unlike many offline

    ads, online ads also can be interactive.[18] For example,

    some ads let users input queries[69] or let users follow the

    advertiser on social media.[70] Online ads can even incor-

    porate games.[71]

    4.4 Targeting

    Publishers can offer advertisers the ability to reach cus-tomizable and narrow market segments for targeted ad-

    vertising. Online advertising may use geo-targeting to

    https://en.wikipedia.org/wiki/Revenue_sharinghttps://en.wikipedia.org/wiki/Cost_Per_Actionhttps://en.wikipedia.org/wiki/Attribution_(marketing)https://en.wikipedia.org/wiki/Interactive_Advertising_Bureauhttps://en.wikipedia.org/wiki/Impression_(online_media)https://en.wikipedia.org/wiki/Pay_per_clickhttps://en.wikipedia.org/wiki/Pay_per_click

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    5.4 Technological variations    7

    display relevant advertisements to the user’s geography.

    Advertisers can customize each individual ad to a par-

    ticular user based on the user’s previous preferences.[26]

    Advertisers can also track whether a visitor has already

    seen a particular ad in order to reduce unwanted repeti-

    tious exposures and provide adequate time gaps between

    exposures.[72]

    4.5 Coverage

    Online advertising can reach nearly every global market,

    and online advertising influences offline sales.[73][74][75]

    4.6 Speed

    Once ad design is complete, online ads can be deployed

    immediately. The delivery of online ads does not need to

    be linked to the publisher’s publication schedule. Fur-

    thermore, online advertisers can modify or replace ad

    copy more rapidly than their offline counterparts.[76]

    5 Concerns

    5.1 Security Concerns

    According to a US Senate investigation, the current state

    of online advertising endangers the security and privacy

    of users.[77]

    5.2 Banner blindness

    Eye-tracking studies have shown that Internet users of-

    ten ignore web page zones likely to contain display ads

    (sometimes called "banner blindness"), and this problem

    is worse online than in offline media.[78] On the other

    hand, studies suggest that even those ads “ignored” by the

    users may influence the user subconsciously.[79]

    5.3 Fraud on the advertiser

    There are numerous ways that advertisers can be over-

    charged for their advertising. For example,   click fraud

    occurs when a publisher or third parties click (manually

    or through automated means) on a CPC ad with no le-

    gitimate buying intent.[80] For example, click fraud can

    occur when a competitor clicks on ads to deplete its ri-

    val’s advertising budget, or when publishers attempt to

    manufacture revenue.[80]

    Click fraud is especially associated with pornography

    sites. In 2011, certain scamming porn websites launched

    dozens of hidden pages on each visitor’s computer, forc-ing the visitor’s computer to click on hundreds of paid

    links without the visitor’s knowledge.[81]

    As with offline publications, online impression fraud can

    occur when publishers overstate the number of ad impres-

    sions they have delivered to their advertisers. To combat

    impression fraud, several publishing and advertising in-

    dustry associations are developing ways to count online

    impressions credibly.[82][83]

    5.4 Technological variations

    5.4.1 Heterogeneous clients

    Because users have different operating systems, web

    browsers[84] and computer hardware (including mobile

    devices and different screen sizes), online ads may appear

    to users differently from how the advertiser intended, or

    the ads may not display properly at all. A 2012 comScore

    study revealed that, on average, 31% of ads were not“in-view” when rendered, meaning they never had an

    opportunity to be seen.[85] Rich media ads create even

    greater compatibility problems, as some developers may

    use competing (and exclusive) software to render the ads

    (see e.g. Comparison of HTML 5 and Flash).[86]

    Furthermore, advertisers may encounter legal problems

    if legally required information doesn't actually display

    to users, even if that failure is due to technological

    heterogeneity.[87]:i In the United States, the FTC has

    released a set of guidelines indicating that it’s the ad-

    vertisers’ responsibility to ensure the ads display any

    required disclosures or disclaimers, irrespective of theusers’ technology.[87]:4–8

    5.4.2 Ad-blocking

    Ad-blocking, or ad filtering, means the ads do not appear

    to the user because the user uses technology to screen

    out ads. Many browsers block unsolicited pop-up ads by

    default.[88] Other software programs or browser add-ons

    may also block the loading of ads, or block elements on a

    page with behaviors characteristic of ads (e.g. HTML au-

    toplay of both audio and video). Approximately 9% of allonline page views come from browsers with ad-blocking

    software installed,[89] and some publishers have 40%+ of

    their visitors using ad-blockers.[4]

    5.4.3 Anti-targeting technologies

    Some web browsers offer privacy modes where users can

    hide information about themselves from publishers and

    advertisers. Among other consequences, advertisers can't

    use cookies to serve targeted ads to private browsers.

    Most major browsers have incorporated  Do Not Trackoptions into their browser headers, but the regulations

    currently are only enforced by the honor system.[90][91][92]

    https://en.wikipedia.org/wiki/Honor_systemhttps://en.wikipedia.org/wiki/Do_Not_Trackhttps://en.wikipedia.org/wiki/Privacy_modehttps://en.wikipedia.org/wiki/Ad_filteringhttps://en.wikipedia.org/wiki/Comparison_of_HTML_5_and_Flashhttps://en.wikipedia.org/wiki/ComScorehttps://en.wikipedia.org/wiki/Click_fraudhttps://en.wikipedia.org/wiki/Banner_blindness

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    8   6 REGULATION 

    5.5 Privacy concerns

    The collection of user information by publishers and

    advertisers has raised consumer concerns about their

    privacy.[27][60] Sixty percent of Internet users would use

    Do Not Track technology to block all collection of in-

    formation if given an opportunity.[93][94] Over half of all

    Google and Facebook users are concerned about their

    privacy when using Google and Facebook, according to

    Gallup.[95]

    Many consumers have reservations about online

    behavioral targeting. By tracking users’ online activities,

    advertisers are able to understand consumers quite well.

    Advertisers often use technology, such as web bugs

    and respawning cookies, to maximizing their abilities

    to track consumers.[60]:60[96][97] According to a 2011

    survey conducted by Harris Interactive, over half of

    Internet users had a negative impression of online

    behavioral advertising, and forty percent feared that

    their personally-identifiable information had been shared

    with advertisers without their consent.[98][99] Consumers

    can be especially troubled by advertisers targeting them

    based on sensitive information, such as financial or health

    status.[96]

    5.6 Trustworthiness of advertisers

    Scammers can take advantage of consumers’ difficultiesverifying an online persona’s identity,[100]:1 leading to ar-

    tifices like   phishing   (where scam emails look identical

    to those from a well-known brand owner)[101] and confi-

    dence schemes like the Nigerian “419” scam.[102][103][104]

    The Internet Crime Complaint Center received 289,874

    complaints in 2012, totaling over half a billion dollars in

    losses, most of which originated with scam ads.[105][106]

    Consumers also face malware risks, i.e.   malvertising,

    when interacting with online advertising.   Cisco's 2013

    Annual Security Report revealed that clicking on ads

    was 182 times more likely to install a virus on a user’s

    computer than surfing the Internet for porn.[107][108]

    For example, in August 2014 Yahoo’s advertising net-

    work reportedly saw cases of infection of a variant of

    Cryptolocker ransomware.[109]

    5.7 Spam

    The Internet’s low cost of disseminating advertising con-

    tributes to spam, especially by large-scale spammers. Nu-

    merous efforts have been undertaken to combat spam,

    ranging from blacklists to regulatorily-required labelingto content filters, but most of those efforts have adverse

    collateral effects, such as mistaken filtering.[6]

    6 Regulation

    In general, consumer protection laws apply equally to on-

    line and offline activities.[87]:i However, there are ques-

    tions over which jurisdiction’s laws apply and which reg-

    ulatory agencies have enforcement authority over trans-

    border activity.[110]

    As with offline advertising, industry participants have

    undertaken numerous efforts to self-regulate and de-

    velop industry standards or codes of conduct. Several

    United States advertising industry organizations jointly

    published   Self-Regulatory Principles for Online Behav-

    ioral Advertising based on standards proposed by the FTC

    in 2009.[111] European ad associations published a similar

    document in 2011.[112] Primary tenets of both documents

    include consumer control of data transfer to third parties,

    data security, and consent for collection of certain health

    and financial data.[111]:2–4 Neither framework, however,

    penalizes violators of the codes of conduct.[113]

    6.1 Privacy and data collection

    Privacy regulation can require users’ consent before an

    advertiser can track the user or communicate with the

    user. However, affirmative consent (“opt in”) can be dif-

    ficult and expensive to obtain.[60]:60 Industry participants

    often prefer other regulatory schemes.

    Different jurisdictions have taken different approaches

    to privacy issues with advertising. The United States

    has specific restrictions on online tracking of chil-

    dren in the   Children’s Online Privacy Protection Act

    (COPPA),[111] :16–17 and the FTC has recently expanded

    its interpretation of COPPA to include requiring ad net-

    works to obtain parental consent before knowingly track-

    ing kids.[114] Otherwise, the U.S.   Federal Trade Com-

    mission frequently supports industry self-regulation, al-

    though increasingly it has been undertaking enforcement

    actions related to online privacy and security.[115] The

    FTC has also been pushing for industry consensus about

    possible Do Not Track legislation.

    In contrast, the European Union’s “Privacy and Electronic

    Communications Directive” restricts websites’ ability to

    use consumer data much more comprehensively. The

    EU limitations restrict targeting by online advertisers; re-

    searchers have estimated online advertising effectiveness

    decreases on average by around 65% in Europe relative

    to the rest of the world.[60]:58

    6.2 Delivery methods

    Many laws specifically regulate the ways online ads are

    delivered. For example, online advertising delivered via

    email is more regulated than the same ad content deliv-ered via banner ads. Among other restrictions, the U.S.

    CAN-SPAM Act of 2003 requires that any commercial

    https://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003https://en.wikipedia.org/wiki/Do_Not_Track_legislationhttps://en.wikipedia.org/wiki/Federal_Trade_Commissionhttps://en.wikipedia.org/wiki/Federal_Trade_Commissionhttps://en.wikipedia.org/wiki/Children%2527s_Online_Privacy_Protection_Acthttps://en.wikipedia.org/wiki/List_of_spammershttps://en.wikipedia.org/wiki/Ransomwarehttps://en.wikipedia.org/wiki/Cryptolockerhttps://en.wikipedia.org/wiki/Ciscohttps://en.wikipedia.org/wiki/Malvertisinghttps://en.wikipedia.org/wiki/Nigerian_scamhttps://en.wikipedia.org/wiki/Phishinghttps://en.wikipedia.org/wiki/Behavioral_targeting

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    9

    email provide an opt-out mechanism.[110] Similarly, mo-

    bile advertising is governed by the  Telephone Consumer

    Protection Act of 1991 (TCPA), which (among other re-

    strictions) requires user opt-in before sending advertising

    via text messaging.

    7 See also

    •   Ad server

    •  App store optimization

    •   Article marketing

    •   Classified advertising

    •   Conversion rate

    •   Digital marketing

    •   Frequency capping

    •   In-text advertising

    •   Inbound marketing

    •  Lead scoring

    •   Media transparency

    •   Netnography

    •   Online identity management

    •   Online lead generation

    •  Pay per click

    •   Post-click marketing

    •   Product feed

    •   Real-time marketing

    •   Search engine marketing

    •  Social media optimization

    •   Viral marketing

    •   Visual marketing

    •   Web banner

    •   Online presence management

    Industry calculations

    •   Click Through Rate (CTR)

    •   View-through rate (VTR)

    •  Cost Per Action (CPA)

    •  effective Cost Per Action (eCPA)

    •  Cost Per Click or Pay Per Click (CPC or PPC)

    •   Cost Per Impression (CPI)

    •  Cost Per Mille (CPM), also known as Cost per

    thousand (CPT)

    •  effective Cost Per Mille (eCPM)

    •   Compensation methods

    •   Classified advertising

    Web advertising

    •   Ad filtering

    •  Advertising network

    •   Article marketing

    •   Affiliate marketing

    •  Bitcoin faucet

    •  Central ad server

    •  Click fraud

    E-mail advertising

    •  e-mail spam

    •  opt-in e-mail advertising

    •   spamming

    •   In-text advertising

    Mobile advertising

    •   Mobile marketing

    •  Mobile development

    •   WAP

    •   Online classified advertising

    •   Overlay

    •  Pay per click

    •  Pay per play

    •   Performance-based advertising

    •  Pop-up ad

    Search engines

    •  Search engine marketing (SEM)

    •  Search engine optimization (SEO)

    •   Semantic advertising

    •   Unicast ad

    •   Web banner

    https://en.wikipedia.org/wiki/Web_bannerhttps://en.wikipedia.org/wiki/Unicast_adhttps://en.wikipedia.org/wiki/Semantic_advertisinghttps://en.wikipedia.org/wiki/Search_engine_optimizationhttps://en.wikipedia.org/wiki/Search_engine_marketinghttps://en.wikipedia.org/wiki/Pop-up_adhttps://en.wikipedia.org/wiki/Performance-based_advertisinghttps://en.wikipedia.org/wiki/Pay_per_playhttps://en.wikipedia.org/wiki/Pay_per_clickhttps://en.wikipedia.org/wiki/Video_overlayhttps://en.wikipedia.org/wiki/Online_classified_advertisinghttps://en.wikipedia.org/wiki/Wireless_Application_Protocolhttps://en.wikipedia.org/wiki/Mobile_developmenthttps://en.wikipedia.org/wiki/Mobile_marketinghttps://en.wikipedia.org/wiki/In-text_advertisinghttps://en.wikipedia.org/wiki/Spam_(electronic)https://en.wikipedia.org/wiki/Opt-in_e-mail_advertisinghttps://en.wikipedia.org/wiki/E-mail_spamhttps://en.wikipedia.org/wiki/Click_fraudhttps://en.wikipedia.org/wiki/Central_ad_serverhttps://en.wikipedia.org/wiki/Bitcoin_faucethttps://en.wikipedia.org/wiki/Affiliate_marketinghttps://en.wikipedia.org/wiki/Article_marketinghttps://en.wikipedia.org/wiki/Advertising_networkhttps://en.wikipedia.org/wiki/Ad_filteringhttps://en.wikipedia.org/wiki/Classified_advertisinghttps://en.wikipedia.org/wiki/Compensation_methodshttps://en.wikipedia.org/wiki/Effective_Cost_Per_Millehttps://en.wikipedia.org/wiki/Cost_per_thousandhttps://en.wikipedia.org/wiki/Cost_per_thousandhttps://en.wikipedia.org/wiki/Cost_Per_Millehttps://en.wikipedia.org/wiki/Cost_Per_Impressionhttps://en.wikipedia.org/wiki/Pay_per_clickhttps://en.wikipedia.org/wiki/Effective_Cost_Per_Actionhttps://en.wikipedia.org/wiki/Cost_Per_Actionhttps://en.wikipedia.org/wiki/View-through_ratehttps://en.wikipedia.org/wiki/Click_Through_Ratehttps://en.wikipedia.org/wiki/Online_presence_managementhttps://en.wikipedia.org/wiki/Web_bannerhttps://en.wikipedia.org/wiki/Visual_marketinghttps://en.wikipedia.org/wiki/Viral_marketinghttps://en.wikipedia.org/wiki/Social_media_optimizationhttps://en.wikipedia.org/wiki/Search_engine_marketinghttps://en.wikipedia.org/wiki/Real-time_marketinghttps://en.wikipedia.org/wiki/Product_feedhttps://en.wikipedia.org/wiki/Post-click_marketinghttps://en.wikipedia.org/wiki/Pay_per_clickhttps://en.wikipedia.org/wiki/Online_lead_generationhttps://en.wikipedia.org/wiki/Online_identity_managementhttps://en.wikipedia.org/wiki/Netnographyhttps://en.wikipedia.org/wiki/Media_transparencyhttps://en.wikipedia.org/wiki/Lead_scoringhttps://en.wikipedia.org/wiki/Inbound_marketinghttps://en.wikipedia.org/wiki/In-text_advertisinghttps://en.wikipedia.org/wiki/Frequency_cappinghttps://en.wikipedia.org/wiki/Digital_marketinghttps://en.wikipedia.org/wiki/Conversion_ratehttps://en.wikipedia.org/wiki/Classified_advertisinghttps://en.wikipedia.org/wiki/Article_marketinghttps://en.wikipedia.org/wiki/App_store_optimizationhttps://en.wikipedia.org/wiki/Ad_serverhttps://en.wikipedia.org/wiki/Telephone_Consumer_Protection_Act_of_1991https://en.wikipedia.org/wiki/Telephone_Consumer_Protection_Act_of_1991

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    10   8 REFERENCES 

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