Newsletter #104 Online Advertising Takes Off

Created on 12/04/06

A special hello to all new subscribers. This article is on the Web at this address.

Our last newsletter (9th March, 2006) was "The Torrent of Bits"
This article is based on one that appeared in the April edition of Business to Business.

There was a time when online advertising was regarded as not even the “poor cousin” of traditional advertising media – it was nowhere. In May 2001 I wrote an article about online advertising that finished with “So will advertising work on the Web? Yes, but not as we know it.” American market research company Parks Associates predicts that by 2010, 10% of all American advertising dollars will be spent online - double what it is currently.

Another recent report conducted by Helen Petrie, professor of human computer interaction at the University of York, found that young Europeans aged 16-24 years view the Internet as their favourite channel for advertising. Another report in the USA found similarly for college graduates.

One of the major changes over the past few years is the growth of paid search advertising. Initially begun by Overture, now part of Yahoo, the trend was accelerated by search engine behemoth Google, whose market capitalization currently stands at over US$100 billion.  Called AdWords by Google, paid search advertising allows companies to bid for advertising space associated with search terms that are relevant to their products and services. For example, my company Netinsites might like to be listed when a person searches for “Website designers” on Google. The amount we are willing to pay will determine the positioning of our advertisement and we only pay if a searcher clicks through to our Website. The AdWords system would also allow us to target New Zealand searchers only if we didn’t want overseas interest.

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Another innovation by Google has been to enable Website owners to make money from similar advertisements on their sites. A sister system to AdWords, AdSense places advertisements on a Website that relate to the content. When a visitor clicks through from an AdSense advertisement, revenue is shared between Google and the Website owner.

AdWords and AdSense have shown that there is a place for targeted advertising on the Internet. Earlier more intrusive banner and skyscraper ads were normally so un-targeted and unhelpful to most surfers that they instinctively filtered them from their view - it was as if they weren’t there.

Everything points to an increasing influence of online advertising over time due to these factors:

1. Younger more Internet-savvy users regard Internet advertising as more important than older users. They will become more influential over time
   
   
2. The ability to measure the effect of online advertising is easier than in other media. Campaigns like AdWords can also be adjusted incrementally in real time to test viewer reaction.
   
   
3. There is a natural increase in the numbers of people on broadband connections who as a result spend more time online
   
   
4. The improvement of the broadband experience as download speeds increase and computers become faster and more reliable.

There is no doubt that online advertising works. It’s just a matter of how it fits into your advertising mix - but fit in it should.

Newbies

The easiest way to make passwords secure is to choose a password with at least 8 characters. Substitute 2 letters of the password with numbers or special characters such as ! @ # $ % & * . This makes it much harder to crack.

Power Users

If you are a power user you should be using your email program to its fullest by sorting mail into folders. If you set up the folders beforehand you can then sort email into them depending on who the sender is, what the subject line is or a whole host of other options. For example in Outlook Express you can go: "Tools", "Message Rules" then "Mail" then set the conditions and actions for when the conditions are met.

MySpace is the social networking site that is just two years old but has more than twice the Web traffic of Google. MySpace users keep in touch with friends via their own personal profile page. The free ad-supported site is so popular amongst teens that there has been a backlash by parents, school and law enforcement worried about lurking sexual predators. http://www.myspace.com

Basecamp is an online project manager that allows you to centralise group communications with co-workers and clients. You can assign to-dos, post messages and gather feedback, schedule events, share files and track people's time. Over 250,000 people use Basecamp. http://basecamphq.com/

"To read is to empower 
To empower is to write 
To write is to influence 
To Influence is to change 
To change is to live." 
Jane Evershed

You can see our other Quick Quotes on the front page of www.netinsites.com; just refresh the page to see another one randomly selected from our database. Great for presentations or times when you want to appear to be a techno-dude(ss)!

To access previous newsletters visit our newsletter archive.

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Best wishes

Alex Garden

Internet Strategy | Website Design | Website Promotion | Web Text Messaging | Email Newsletters | Online Sports Games | Content Management