Categorized | Web Advertising

Promotions: Marketing and Sales 8.5. Web Advertising

No matter what your marketing strategy, at some point you’re going to entertain a serious Web advertising initiative. You will have extracted as much value as you can from search engine marketing and link exchange, or you’ll just get the itch to start prospecting in different streams.

Web advertising can be much easier and cheaper than media, outdoor, or direct response advertising. Not only that, you get instant feedback. With some well-oiled Web analytics in place, you will know if your ad is driving paying customers to your site or just taking up cyberspace. In addition, there are several pricing models. When you buy a TV ad, you shell out a pile of cash and that’s it. But you can pay for Web ads in a variety of ways. You can pay for each appearance of the ad, you can pay each time someone clicks the ad to visit your site, or, better yet, you can pay only if a visitor gives their name or buys something. Wow!

On the other hand, Web advertising is much, much harder than media advertising. It involves some real quantitative work. If you don’t have a head for statistics, you’re not going to get the full value from your Web ads. In addition, you have only the smallest space to make an impression―and users are free to ignore you. See, when folks sit in front of a TV, they have no choice but to vegetate while the ads go by. Web users aren’t quite so passive. They’ve come to a site to do something, not click your ad. So you have two tasks to accomplish: you need to get people’s attention and then inspire them to leave the page they wanted to see to come to your Web site. That’s a pretty tall order for a tiny little ad to fill.

Finally, there are only so many places you can put a TV, radio, or print ad. There are a billion places you can put your Web ad. How do you choose?

Let’s untangle this Web first by pulling it apart. Web advertising has the following components:

  • Creative: this is the messaging, graphics, animation, video, or audio that users see when you’re ad is loaded on a Web page.
  • Impression: when your ad is displayed on a Web page delivered to an end user, this is one impression, no matter what the user does. Some Web site content owners consider any download of an ad to be an impression, while others consider only a full download counts as an impression. Since ads are dynamically served, you and the site owner can control to some extent on what kinds of pages, in what context, and when the ad will appear. When site publishers charge for each impression, the pricing model is called a “cost-per-mil” (CPM) model, where “mil” stands for 1,000 impressions.
  • Click or click-through: virtually all ads link back to some Web resource: a home page, a landing page, a registration page, a video, or some other Web-served goodie. When a user actually clicks an ad to navigate to the background Web resource, this is a called a “click” or “click-through.” Ad effectiveness is most typically―and most roughly―measured by the click-through rate. Most site owners charge advertisers for each click an ad generates; this is called a “cost-per-click” (CPC) pricing model.
  • Context: your ad could appear on any old page or it could appear only on pages with content highly relevant to the ad or the underlying Web resource. Search engine advertising works entirely as context advertising since ads are placed only in relation to the search words employed by users.
  • Media placement: In the corporate world, Web media placement is a complex art practiced by seasoned professionals. Simply put, media placement is about determining where to put your ads, how much to pay, how many impressions you want on each site, and then tracking the placement to make sure it happens. With media placement, you can specify when an ad will appear (the day part), in what context (pages with certain keywords), and even location (only to Web pages served to IP addresses located in Minneapolis).
  • Analytics and tracking: While you may be tempted to stop at producing a banner or text ad and placing it in a few places, 99% of the work in Web advertising is tracking and analyzing the results. For this, you would use Web analytics software such as those discussed in section 7.12. Web advertising without analytics is, well, a waste of time.

Like traditional advertising, there are only so many formats Web advertisement can take.

  • Banner ads (banners, rectangles, buttons, and skyscrapers): Banner ads are graphic or animated ads that appear in a clearly-bounded location on a Web page, usually at the top or right side of the page. The shape of the ad determines the type of ad (banners are long rectangles that typically load at the top or bottom of a page, rectangles look more like squares and are slightly smaller than banners and appear on the sides of pages, buttons are very small rectangles that can appear anywhere on the page, and skyscrapers are vertical rectangles that appear on the side of a page). To be effective, banner ads have to grab a viewer’s attention, get them interested, and have an associated action (such as clicking the ad). Banner ads typically have a response rate between 0.2% and 0.5%, that is, out of every 1,000 ads served to users (i.e., out of every 1,000 impressions), about two to five users actually click the ad to visit the underlying site.
  • Expanding ads: Also called “pull-downs,” these Flash-constructed ads are banner ads that expand when you roll the mouse over the ad or click the ad. The banner then expands to a larger format (obstructing the underlying Web page). Because the ads are Flash-based, the ads can pull out to accommodate a video stream. Pull-downs are essentially two ads: the banner version and the expanded version. These ads have powerful branding potential and their click-through rate is typically 1.5% (fifteen clicks for every 1,000 impressions).
  • Text ads: Text ads ordinarily consist of a title, description, and link. They are the most common form of Web advertising and are the form taken by paid placement ads on search engines (search advertising). Google’s AdWords (8.6.1) and Microsoft’s adManager (8.6.4) are text ad services.
  • Interstitials: Interstitials are full-page ads that load when you click a link on a site to go to another page. Also called “full-page ads,” “transition ads,” “takeovers,” and “intromercials,” these ads essentially take over your browser for a brief period or until you click “Skip Ad.” Of all the Web advertising formats, interstitials come closest to a traditional TV or print ad and are extremely effective at building awareness. They are extremely expensive (as you can imagine) and are typically used by deep-pocket advertisers.
  • Pop-ups/pop-unders: You done seen ‘em and probably done hate ‘em. Pop-up ads appear in a small (or large) window that automatically loads when you visit a Web page. A pop-under is just like a pop-up ad, only it loads below the browser window. The user often doesn’t even know the ad has loaded. However, when the user closes the browser, there it is. Pop-ups and pop-unders, as you know from experience, grab a user’s attention pretty righteously, so they tend to be more expensive than banner ads. A banner ad might get two to five clicks per 1,000 impressions, but a pop-up usually gets thirty or more clicks per 1,000 impressions. Because most browsers now come equipped with pop-up blockers―extra code that prevents pop-ups from appearing―the effectiveness of pop-up ads is rapidly waning.
  • Exits: Pop-unders are a little more special than pop-ups. Because of their unobtrusiveness, they are often used to load full-page Web sites, not just a small ad. They can also be coded to load after the user has closed the generating page. And, if you’re in an especially malevolent mood, they can endlessly reproduce as each pop-under generates yet another pop-under. As the song goes, you can check out, but you can never leave. When marketers use pop-unders to load a full-page site, they are generally known as exits, since they appear to the user after closing the browser window. Many widget advertisers (see below) uses full-page pop-unders and you can even join exit exchanges (see 8.9) where you trade exits with other Web site owners.
  • Floating ads: A bizarre cross between a banner and a pop-up ad, a floating ad seems “unglued” from the page and either hovers or glides across the page for anywhere from five to thirty seconds―or until you click the “close” icon. Since these ads impede the visitor’s use of the site in the same way as a pop-up, floating ads typically cost much more than a typical banner ad, but they unquestionably get a user’s attention. They also have the benefit of being encoded directly into the page so they can slip by any browser pop-up blocker. Floaters get click-through rates that match up pretty well with pop-ups, about 3%, or thirty clicks for every 1,000 impressions.
  • Email and opt-in email lists: Ever since the first mass e-mail campaign back in 1996, we’ve all been crushed by veritable mountains of email advertising. Most of these ads are generously sponsored by some pretty shady characters, but email advertising has a legitimate and effective place in almost every marketing strategy. If you use opt-in lists (where the recipient agrees to receive your email ads), opt-in newsletters, or place text or banner ads in other people’s email newsletters, you can generate great response rates for very little money. After all, it costs almost nothing to send an email. We will discuss email promotions in more detail in section 8.14.
  • Rich media ads: Rich media ads (also called “Unicast,” “television” or “mini-television ads”) are video ads that appear in a pop-up window or a sidebar space on a Web site. These ads are typically five to thirty second commercials with full audio. Not only do they get a viewer’s attention, they have one of the highest click-through rates of any Web ad format: 5% or fifty clicks for every 1,000 impressions.
  • Video overlays: Also called “hotspots,” video overlays use Flash to overlay an ad on top of a video stream. Because the audience for online video is now equal to the cable video audience, overlays allow advertisers access to this huge market by placing ads directly on top of videos that people watch. While a relatively new technology, overlays have phenomenal click-through rates―up to 150 clicks per 1,000 impressions. As the Web becomes more and more like television, it is highly likely that video overlays will be your primary advertising tool in four or five years time.
  • Sponsorships: Just like in the old days of television and radio, you can “sponsor” a Web site or page. While not quite an ad, your sponsorship would be acknowledged on the page with graphics or text: “This page sponsored by [fill in your name here].” You typically pay a flat fee, but some Web owners will enter into pay-per-click arrangements, as well. Do not, however, confuse genuine sponsorship with the “sponsored links” offered up by text advertising engines. Sponsored links are normal, everyday pay-per-click ads wearing a high-falutin’ name.
  • Widgets: not all widget ads are technically widgets, but that doesn’t really matter. Many widget ads are associated with free software, such as media players. The software is free because the user agrees to have ads appear on the software interface. Some widgets are not stand-alone applications, but small applications that access the Web for very specialized or limited content; these widgets can reside on a user’s desktop or in a Web page. Because widget advertising services have very, very precise user profiles―many of them include “adware” or “spyware” that gathers information about users and their browsing habits―they can provide amazingly precise targeting.

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