Online advertising has become the preferred method for companies to market their products to customers. The primary reason for this is the efficiency, effectiveness and ability to give a personalized advertisement to potential customers who are searching the web on their computers and wireless devices. Marketers who invest in online advertising can track metrics such as page impressions, click-through-rates, conversions searching trends, demographics and psychographics.
Online advertising defined for me is the ecosystem that drives the buying and selling of digital ad placements between advertisers and publishers that ultimately keeps the internet free for you.
With this information, online advertising technology can segment and target potential customers and give an ad campaign that is best suited for the company who is doing business with the ad exchange. Management information system technology is responsible for ad servers running effectively and reporting back accurate and quantifiable data back to the ad exchange and client.
digital ad spend is projected to hit 204 billion by 2014.
The main formats that Define Online Advertising:
There are a multitude of formats for advertising online, which include search, display/banner, classifieds, lead generation, digital video, rich media, sponsorship and email. Pricing for online ad campaigns is generally priced two ways: CPA, or CPM. CPA stands for cost per acquisition and payments are made to the ad exchange when a person clicks and advertisement and “converts” meaning that they fill in information or purchase a product. This is all tracked with codes that are embedded into the banner ads that the ad server stores and quantifies. CPM is cost per 1000 impressions.
Google buys Admeld – Historical Moment for the Industry
Google has realized and ultimately pioneered the market and defined online advertising because of the exponential growth of the industry and purchased Admeld, a company who uses proprietary technology to serve targeted advertising campaigns. Google paid 300 million dollars for the company, which is speculated to be way overpriced. Google is making a statement by acquiring the small company for such an expensive price.
“Google Buys AdMeld in Latest Web Acquisition: Report | Reuters.” Reuters.com. 09 June 2011. Web. 14 Nov. 2011. <https://www.reuters.com/article/2011/06/09/us-admeld-google-idUSTRE7587ER20110609>.
Even more recently, Yahoo acquired Interclick, a data targeting company for 270 million. “Yahoo Acquires Interclick For $270 Million, Enhances Data Targeting.” Mediapost. Web. Like Google’s acquisition of Admeld, Interclick has a similar business model by providing data targeting and advertising campaign optimization to clients. “This investment underscores our focus on enhancing the performance of both our guaranteed and nonguaranteed display business across Yahoo and our partner sites and, combined with Yahoo’s reach and advertising leadership, will deliver a powerful solution for marketers,” said Ross Levinsohn, EVP, Americas region.
This trend of acquiring data targeting companies by fortune 500 companies show the predicted growth of the online advertising industry as well as the general growth of internet technologies. These companies that have the most productive and efficient systems will be the most profitable in the future.