Online Display Advertising – An Overview

Display advertising is graphical advertising on the World Wide Web that appears next to content on web pages, IM applications, email, etc.

These ads, often referred to as banners, come in standardized ad sizes, and can include text, logos, pictures, or more recently, rich media.

Rich media, synonymous for interactive multimedia, is enhanced media that utilizes a combination of text, audio, still images, animation, video, and interactivity content for active participation from the recipient of the ad.

The internet has become an ongoing emerging source that tends to expand more and more. The growth of this particular medium attracts the attention of advertisers as a more productive source to bring in consumers.

A clear advantage consumers have with online advertisement is the control they have over the product, choosing whether to check it out or not.

Online advertisements may also offer various forms of animation. In its most common use, the term "online advertising" comprises all sorts of banner, e-mail, in-game, and keyword advertising, on platforms such as Facebook, Twitter, or Myspace has received increased relevance. Web-related advertising has a variety of sites to publicize and reach a niche audience to focus its attention to a specific group. Research has proven that online advertising has given results and is growing business revenue. For the year 2012, Jupiter research predicted $34.5 billion in US online advertising spending.

You may picture display advertising like magazine or newspaper ads, just online and - like TV commercials - with the possibility of moving from static to interactive, flash and video. However, display advertising has a significant advantage over advertising in magazines, newspapers and TVs:

• Targeting options such as demographic and behavioral targeting are available to laser in on your audience and,
• You can track the performance of your campaign daily to measure metrics such as impressions, clicks and conversions to calculate your ROI.

Online advertisement as Digital Promotions for Television

Online advertisement can also be classified as Digital Promotions. Digital promotion in connection to the television industry is when networks use authentic digital resources to promote their new shows in a growing vast range of venues.  Television networks development of digital off air promotional strategies allowed digital promotion to remain significant to the advertisement advancement in the television.

Examples of television online digital promotions:

The Sci Fi network for loaded a special recap episode of Battlestar Galactica onto Microsoft’s Xbox online gaming service; this gave the audience additional opportunities to sample content if they may or may not be familiar with the show.

Another example of digital promotion in television is when network CBS incorporated new digital technologies of Bluetooth-enabled mobile devices that were able to download a thirty seconds clip of the new advertised show on their devices; consumers standing in range of billboard don’t need an internet link to down load the show’s content. These non-linear viewing opportunities provided as a valuable tool for gaining audiences; and to encourage them to intersection with the linear audience.

Revenue models

The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.

CPM (Cost Per Mille) or CPT (Cost Per Thousand Impressions) is when 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 a reload or internal user action.

CPV (Cost Per Visitor) is when advertisers pay for the delivery of a Targeted Visitor to the advertisers website.

CPV (Cost Per View) is when advertisers pay for each unique user view of an advertisement or website (usually used with pop-ups, pop-under and interstitial ads).

CPC (Cost Per Click) or PPC (Pay per click) is when advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.

CPA (Cost Per Action or Cost Per Acquisition) or PPF (Pay Per Performance) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This model ignores any inefficiency in the seller's web site conversion funnel.

The following are common variants of CPA:

CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale.

CPS (Cost Per Sale), PPS (Pay Per Sale), or CPO (Cost Per Order) advertising is based on each time a sale is made.

eCPM: Effective CPM or eCPM calculated through other conversion events such as Cost per Clicks, Cost per Downloads, Cost per Leads etc. for example when an advertiser getting $2 per download and for 100,000 impressions you received 10 downloads worth $20, in this case your effective CPM or eCPM will be 2*20*1000/100,000= $0.4

Fixed Cost: Advertiser paying fixed cost for delivery frame by campaign flight dates without any relevance to performance

Cost per conversion describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.

Source: help.yahoo.com and www.wikipedia.com