Online Advertising
Online advertising uses the Internet for the purpose of delivering marketing messages to attract customers. There is a wide variety of online advertising avenues such as: banner ads, Social network advertising, contextual ads on search engine results pages, email spam, interstitial ads, advertising networks and online classified advertising.
Online advertising provides a huge competitive advantage over traditional advertising. With no limit by geography and time, the availability of immediately publishing information and content allows advertisers to reach a global audience. Also to consider is the efficiency of the advertiser’s investment since online advertising allows for customization of ads including posted websites and content. Yahoo! Search Marketing, Google AdSense and AdWords for example, allow advertisements to be shown alongside search results of related keywords or on relevant web pages.
There are 3 most common ways in which online advertising is purchased: CPA, CPM and CPC, along with some other types. “Cost Per Action,” or “Cost Per Acquisition,” or CPA advertising is common in the affiliate marketing sector and is performance based. This payment scheme works in the way the publisher takes all the risk running the ad and the advertiser only pays for the amount of users who complete a transaction such as a sign-up or a purchase. The CPA is the best type of rate to pay for banner ads and is the worst type of rate to charge as it ignores any inefficiency in the sellers web conversion funnel.
CPM stands for “Cost Per Mille”, also called "Cost Per Thousand,” or CPT. This type is where advertisers pay for exposure of their message to a specific audience. "Per mille" means per thousand impressions or loads of an advertisement however, some impressions may not be counted, such as an internal user action or a reload.
“Cost Per Click,” or CPC is also known as “Pay Per Click,” or PPC. In this system, advertisers pay each time a user clicks on their listing and is redirected to their website. This system lets ad specialists gain information about their market and refine searches. Advertisers only pay when the listing is clicked on, they do not actually pay for the listing itself. With the Pay Per Click pricing system, advertisers pay for the right to be listed under a series of target words that direct relevant traffic to their website. They only pay when a user clicks on their listing that links directly to their website.
“Cost Per Visitor,” or “Cost Per View,” or CPV is another option. It is where advertisers pay for the delivery of a Targeted Visitor to the advertisers’ website. Cost Per View is when an advertiser pays for each unique user view of a website or an advertisement and is typically used with interstitial ads, and pop-ups. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site or not.
